September 26, 2023

Visualized: The Global Implications of Fertilizer Shortages

Fertilizer, the lifeblood of agriculture and a key input in global food production, is currently in high demand. However, a notable supply shortage could trigger a domino effect of harmful consequences, if not addressed.

In this visualization from our sponsor Brazil Potash, we take a look at the knock-on effects of fertilizer shortages.

High Fertilizer Costs

Recent supply chain disruptions, initially caused by the COVID-19 pandemic and later exacerbated by the onset of the war in Ukraine, have been causing fertilizer prices to skyrocket. Although these prices have slowly begun to cool, they are still hovering significantly above their pre-pandemic levels.

Long-term prices are expected to be driven by the growing global population and evolving patterns in agricultural productivity.

Rising fertilizer prices have a critical impact on the accessibility of this vital commodity to farmers. This is especially true for farmers in low-income, food-deficit countries. As a result, we see a direct impact on global food prices and overall food security.

Strained Food Security

Although fertilizer prices are not the sole determinant of overall crop production, they play a vital role in optimizing yields. An imbalance in this dynamic can have severe consequences.

World cereal production declined 1.3% year-over-year from 2021 to 2022, with Europe down 5.9%.

Region % change in cereal production
South America 7.9%
Oceania 1.3%
Asia 0.4%
Europe -5.9%
North America -4.7%
Africa -2.3%
Central America and the Caribbean -1.7%
World -1.3%

Research shows that high fertilizer prices in 2023 could lead to increased undernourishment. This would affect around 100 million people and cause approximately 1 million additional deaths.

With the planet’s population expanding, it’s critical to ramp up crop production to safeguard global food security.

The Case for Localized Production

One strategy to combat the rising cost of fertilizers and avoid the looming risk to food security is investing in new, localized fertilizer companies. This approach could significantly reduce costs, creating a buffer against supply chain disruptions.

Brazil Potash is actively involved in extracting and processing local potash ore, a key ingredient in many fertilizers. This enhances yields and fortifies crop growth across Brazil, effectively creating a localized supply chain resilient to global disruptions.

With innovative approaches like those taken by Brazil Potash, there’s hope to offset the potential risks to global food security.

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