Ukraine and Russia’s targeting of each other’s Black Sea shipping traffic could again drive up not just grain but fertilizer prices. Russia’s targeting of Black Sea commercial shipping traffic for Ukraine after pulling out of the Black Sea grain deal and Ukraine’s threat to reciprocate against Russian ships threaten more than grain.
Russia’s the world’s top fertilizer exporter, and its invasion of Ukraine last year aggravated already tight supplies, driving fertilizer prices to all-time highs in March. American Farm Bureau senior director of government affairs Dave Salmonsen says the latest developments only revive a bad situation.
He says, “I think maritime insurers are not going to be extending very favorable rates for anyone wanting to sail the Black Sea. So that will certainly at some point have an impact, you would think, on fertilizer.”
Global fertilizer prices rose 30 percent by early 2022 on the heels of an 80 percent hike in 2021 before easing this year, according to the World Bank.
Separately, renewed grain shortages could boost not just prices U.S. producers get but demand for U.S. food donations, depending on supplies on-hand in needy countries. Salmonsen says, “How much ahead of time they stockpiled, how much they were able to, how much reserves they have, but again, if this is a real disruption that really shorts supply and shorts their opportunity to import, there certainly may be more demands for food assistance from the U.S. and from other countries.”
That puts added pressure on the U.S. Food for Peace program and the depleted Bill Emerson Humanitarian Trust. An estimated 126 million people in the most vulnerable countries are acutely food insecure—a 70-percent leap from 2019 pre-pandemic levels.