UN Promotes a Decrease in the Cost of Fertilizers Globally
- 06-Oct-2022 5:00 PM
- Journalist: Nicholas Seifield
GENEVA - According to a top official, the UN is pushing for price reductions on fertilizers to prevent a future shortage. UN trade officials were involved in talks aimed at boosting the export of Russian fertilizers, including ammonia.
According to the UN, Russia's intervention in Ukraine has exacerbated the world food crisis and driven up fertilizer costs. Russia and Ukraine are important grain exporters to the world, and Russia is one of the major exporters of fertilizers. The affordability challenges the world is currently facing due to high fertilizer prices, will soon turn into a supply crunch. The UN is already working to address that issue by lowering the cost of fertilizer to prevent future problems.
With 13% of the world's production of potash, phosphate, and nitrogen fertilizers—essential crop and soil nutrients—Russia is one of the biggest suppliers in the world. In the first half of 2022, Russia's exports of fertilizers decreased by 7%. A comprehensive agreement mediated by the UN and Turkey on July 22 that also resumed shipments of grain and fertilizer from Ukraine over the Black Sea is one of its main components facilitating Russia's food and fertilizer exports. The agreement has drawn criticism from Russia, which claims that its exports are still constrained.
The agreement contains Ammonia, a crucial component of nitrate fertilizer. These ammonia exports are currently being attempted to resume by the UN. Previously, the Russian invasion of Ukraine on February 24 forced the closure of the pipeline carrying ammonia from the Volga area of Russia to the Black Sea port of Pivdennyi (Yuzhny).
According to the ChemAnalyst database, it is anticipated that the prices of fertilizers will likely decline on the back of orders by the UN to lower food inflation globally. These fertilizers may include Ammonia, Potash, Nitrogen, and others. This price decline will positively impact agriculture values, which have been struggling for the past few months due to the geopolitical war.