THE FERTILIZER CRUNCH
Analysis by Shawn Arita presented in an AMIS/IFPRI policy seminar in April 1 showed that it would take until the end of 2026 for fertilizer prices to return to pre-war prices even if there was an immediate cessation of hostilities.
natural gas simultaneously serves as a feedstock for and powers most ammonia production around the world. Ammonia, the building block for most nitrogenous fertilizers, is one of the most widely produced industrial chemicals, and beyond fertilizers has many applications in other chemicals, industry and energy. OFQ : What lessons can we learn from the crisis? RH: Global food production will remain vulnerable to shocks as long as it is dependent on a handful of inputs that come from a handful of countries. Accelerated investments in technological development to reduce this vulnerability is essential, e.g. seed-based solutions
OFQ : Do you expect long-term consequences and damage?
RH: Some fertilizer production capacity has been damaged which means prices are projected to remain elevated even once trade normalizes. A key question is whether there will be an impact on global food production in some of the major growing seasons, but this is not yet clear and depends on factors such as how crop choice and input use decisions are impacted and whether production falls if fertilizer use falls. Also, higher fuel prices are resulting in higher consumer food prices in many countries with already immediate impacts on welfare. OFQ : Can the situation with fertilizers be compared to hydrocarbons or are the commodities completely different? RH: They definitely share some similarities. Both oil and fertilizer production is concentrated in a few regions, which make both sectors prone to supply shocks. Both also have a huge impact on food systems. The connections between natural gas and fertilizers are even stronger since
International Food Policy
to improve sustainable nitrogen provisioning and green ammonia technologies.
Research Institute
Today there exist strong possibilities for improving nutrient use efficiency that did not exist before. Meanwhile, the availability of location-specific AI- enabled advisories helps scale these approaches which are often site-specific. Nutrient use efficiency will be more attractive when nutrients reflect their true cost. Governments need advice on how to provide support to farmers that ensures their profitability without increasing subsidies that mask the price of inputs. The policy options are increasingly available.
The International Food Policy Research Institute (IFPRI) pro- vides research-based policy solutions to sustainably re- duce poverty and end hunger and malnutrition in develop- ing countries. Established in 1975, the institute supports evidence-based policies that contribute to poverty reduc- tion and help ensure that all people have access to safe, sufficient, nutritious and sus- tainably produced food. IFPRI is a Research Center of CGIAR, the world’s larg- est agricultural innovation network, and the only CGIAR center exclusively dedicat- ed to food policy research. It currently has more than 480 employees from around the world working in over 70 countries, with about half of the research staff based in developing countries. Research is aligned with CGIAR’s five impact areas: nutrition, health and food security; poverty reduction, livelihoods and jobs; environ- mental health and biodiversi- ty; gender equality, youth and social inclusion; and climate adaptation and mitigation.
Urea and ammonia nitrate exports October 2019 – April 2025
Metric tons (millions)
12
10
2.4
1.6 0.83 2.3
0.74 0.95
2.2
0.13
8
1.1 2.5
2
2.5
0.65
1.3 0.67
6
2
0.82 1.3
5.8
5.2
5.2
4
4.7
4.7
3.8
2
0
2019 – 2020 2020 – 2021
2021 – 2022 2022 – 2023 2023 – 2024 2024 – 2025
Time frame (October-April)
China
Indonesia
Egypt
Russia
Source: TDM
1 https://www.amis-outlook.org/list-details/events/tkvhxql4r4fph39m8akkl7tk
11
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