Global Food Security at Risk Amidst Supply Disruptions
Disruptions to the supply of fertiliser and its key ingredients, stemming from regional conflicts and geopolitical tensions in the Gulf, could lead to a weekly loss of up to ten billion meals, disproportionately affecting the world’s poorest nations. This stark warning comes from Svein Tore Holsether, chief executive of Yara, one of the world’s largest fertiliser producers.
Speaking to the BBC, Holsether highlighted that hostilities in the Gulf, which have impacted shipping through the crucial Strait of Hormuz, are jeopardizing global food production. He cautioned that reduced crop yields due to lower fertiliser use could ignite a fierce bidding war for food supplies.
Impact on Crop Yields and Prices
Holsether urged European nations to carefully consider the broader implications of a potential price war on the “most vulnerable” populations in other countries. “We’re up to half a million tons of nitrogen fertiliser not being produced in the world right now because of the current situation,” Holsether stated. He elaborated on the potential consequences: “What does that mean for food production? I would get to up to 10 billion meals that will not be produced every week as a result of the lack of fertilisers.”
He further explained that failing to apply nitrogen fertiliser could reduce crop yields for certain crops by as much as 50% in the first season. Farmers globally are grappling with a multitude of challenges, as the prices they can command for their produce have not yet adjusted to cover their escalating operational costs.
“They’re faced with higher energy costs, diesel for a tractor is increasing, other inputs for the farmers are increasing, fertiliser cost is increasing, but yet the crop prices haven’t increased to the same extent yet,” he noted.
The Threat of a Bidding War
The price of fertiliser has seen a dramatic increase, soaring by 80% since the beginning of the conflict involving the US and Israel in the region. Holsether warned that a continuation of these geopolitical tensions could result in a bidding war for food between wealthier and less affluent nations.
“If there’s a bidding war on food and one that Europe is robust enough to handle, what we need to keep in mind in Europe is, okay, in that situation, who are we buying the food away from?” he questioned. “That is a situation where the most vulnerable people pay the highest price for this in developing nations where they cannot afford to follow that.”
This scenario has profound implications for “food affordability, food scarcity and hunger,” according to the Yara boss. While countries like the UK are unlikely to face direct food shortages, the increased costs for food producers are anticipated to translate into higher weekly food bills in the coming months. The Food and Drink Federation recently projected that food inflation could reach 10% by the end of the year.
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