Ukraine war 'catastrophic for global food'

Image source, Getty Images

The boss of one of the world's biggest fertiliser companies said the war in Ukraine will cause a shock to the global supply and cost of food.

Yara International buys essential raw materials from Russia.

Fertiliser prices were already high.

Svein Tore Holsether warned that the situation could get worse.

He said things are changing by the hour.

We were already in a difficult situation before the war and now we are getting close to the most important part of this season for the Northern hemisphere, where a lot of fertiliser needs to move on.

Russia and Ukraine are major producers of food and agriculture.

Potash and phosphate are key ingredients in fertilisers, which enable plants and crops to grow.

Half the world's population gets food as a result of fertilisers, and if that is removed from the field for some crops, the yield will drop by 50%.

It is not whether we are moving into a global food crisis - it is how large the crisis will be.

Image source, Yara International

His company was affected by the conflict after a missile hit Yara's office. The 11 staff were not injured.

The company is having to deal with the fall-out from the sanctions against Russia. The shipping industry has been disrupted so trying to secure deliveries has become more difficult.

The Russian government told its producers to stop exporting fertiliser just hours after Mr Holsether spoke.

About 25% of the key nutrients used in European food production come from Russia.

We are doing everything we can to find additional sources. He said before the news emerged that it was limited because of the short timelines.

Analysts warned that the move would mean higher costs for farmers and lower crop yields. That could cause food costs to go up even more.

There are other factors to consider, too.

Natural gas is needed to produce ammonia, the key ingredient in nitrogen fertiliser. Russian gas is used for Yara International's European plants.

It was forced to temporarily suspend production of 40% of its capacity in Europe because of a spike in the price of gas. Other producers cut supplies as well.

The combination of higher shipping rates, sanctions on Belarus, and extreme weather caused a big jump in fertiliser prices last year.

It is too early to say if there will be more shutdowns, as the company is making day-to-day evaluations on how to maintain supply.

It acknowledges that it has a very strong obligation to keep production running.

The boss of Yara says the world needs to reduce its dependence on Russia for food production.

On the other hand, we are trying to keep up the agricultural yields.

There has to be a strong reaction. This is a difficult dilemma because we condemn the Russian military invasion of Ukraine.

Climate change and growing populations had already been adding to the challenges the global food production system faces.

The Yara International chief executive describes the war as a catastrophe on top of a catastrophe, highlighting how vulnerable the global food supply chain is now.

He says that it will increase food security in poorer countries.

In the last two years, there has been an increase of 500 million more people going to bed hungry.