Higher fertilizer prices and / or a shortage of fertilizer supply resulting from the war in Ukraine will not have an immediate impact on food prices and food production. Currently the ferilizer market in the northern hemisphere is relatively quiet. All transoceanic flows for the upcoming northern hemisphere spring season have already taken place, and movements are now primarily at the local levil.
The first crop-growing regions to be ‘at risk’ are India and Latin America. India is partially out of danger, but Latin America is highly exposed. Potash availability for soybean production might be compromised, as Belarus and Russia account for 40% of the world’s potash production and exports. Consequently, Brazil’s 2023 soybean harvest might be the first crop to experience direct negative impacts from Russia’s war in Ukraine.
The good news is that Latin American markets don’t need fertilizer in their fields until September – which means fertilizers need to arrive at Brazilian ports in July-August and there are still three months to work out a solution. A careful assessment of the 2023 cropping season, however, is necessary.