Request for the past 10 years, the increase in fertilizer prices called a new reason for the rise in price of food, reports Bloomberg.
According to analyst from VTB, Elena Sakhanova, the price of three main fertilizer groups – potassium, phosphorus and nitrogen – are located on a record in the last 10 years, which seriously affects global food inflation.
Corn will suffer from raising prices. About 20 percent of the expenditures on its cultivation fall on fertilizers. The poor corn harvest will be wrapped with an increase in feed costs, which ultimately will lead to higher prices for meat. Juices and carbonated drinks can also rise in price because corn is their main ingredient. It is expected that corn crops in 2022 will be reduced to 36.8 million hectares from the current 37.8 million.
One of the factors of fertilizer’s rise in price is unfavorable weather conditions. Permanent storms at the end of the summer of 2021 on the coast of the Gulf of Mexico in the United States prevented the import and export of products. Also, because of this, plants in the region were temporarily closed, including the world’s largest nitrogen complex owned by CF Industries Holdings. Together with this, due to gas prices, the company was forced to close two plants in the UK. One of the world’s largest fertilizer providers Yara International ASA also stated that high natural gas prices will force it to cut about 40 percent of ammonia production in Europe.
In addition, transportation is becoming more expensive. According to one of the heads of Quest Products, helping to bring new products to the market, including pesticides and fertilizers, freight is about 15 percent of the cost of purchasing goods. Political measures also affect the rise. Thus, the United States and Europe introduced sanctions against a major manufacturer of fertilizer of Belaruskali.
World food prices have reached a maximum for 60 years. In August 2021, they grew by 33 percent. Causes are record droughts, lack of labor, as well as problems in supply chain.