A global fertilizer shortage is driving up food prices and sending developing countries into crisis. Says the head of a significant fertilizer company. Swain Torre Holster, CEO of Yara International, said higher gas prices add to fertilizer costs and affect global food prices.
Fertilizer requires a large amount of gas to produce. Mr. Holsether said Yara had been forced to cut some production due to higher gas prices, which resulted in bottlenecks. The chairman said shortages would hardest-hit developing countries as crop yields decline and food prices rise. “It’s terrifying, we are facing a food crisis, and vulnerable people are being severely affected,” he told the BBC Today program.
“It affects food prices around the world and weighs on many people’s wallets. But for some people, especially in developing countries, it’s not just about your wallet. It’s a matter of life or death.” Less fertilizer, says Holster, means farmers in developing countries cannot grow efficiently, resulting in smaller yields.
Farmers use fertilizers to increase crop yields, such as corn, canola, and wheat.
Producing ammonia, which is found in many fertilizers, is currently based on hydropower or natural gas.
In recent months, the rise in gas prices was driven by several factors driving demand, including the opening of the economy. During the pandemic and a reduction in wind and rain for renewable energy. This resulted in a sharp rise in fertilizer production costs. With the price of ammonia – a product Yara International makes more than anyone else in the world – up 255% year over year.
Mr. Holseter said the situation was “precarious” and called for support and funding from the World Food Program “to avoid a major famine. He said Yara donated 40,000 tonnes of fertilizer last year, doubling the yield of smallholder farms in East Africa. “That says a lot about the effects fertilizers can have,” he added.