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  • Rovindu Ambagolla

Monday Market Musings >>> The Global Fertiliser Crisis

Updated: Oct 18, 2021


Picture credit: Nandhu Kumar


The world has been plagued by the Covid-19 pandemic for the past two years, but due to the rapid rollout of the Covid-19 vaccine, the pandemic around most parts of the world is being contained relatively well. However, we are starting to feel the aftershocks that the Covid-19 pandemic has stirred, with world fertiliser prices skyrocketing.


Fertiliser costs are on the rise and farmers around the world are facing the consequences. Fertiliser prices in North America have increased by more than 50% and hit record new prices. There are many factors leading to this global price hike, such as rising demand and long term supply chain disruptions caused by the pandemic, but the most prominent reason is actually due to natural gas shortages this year which are driving up the demand and price for this commodity.


The surge in gas prices globally has cascaded onto fertiliser prices as natural gas is an important element in making nitrogen fertiliser. These price hikes have even led to two of the UK’s biggest fertiliser plants to shutdown, sparking concerns of a possible food supply shortage.


Picture credit: Etienne Girardet


Farmers worldwide are struggling to meet the demand amongst the global price hikes.

Canadian authorities have warned farmers that they might have to cut back on fertiliser usage. France, the EU’s top wheat grower, has indicated that it will face difficulty in sourcing fertiliser next year. Brazil is also facing difficulties as many farmers have not been able to secure their fertiliser needs. President Bolsonaro has commented that the country is at risk of facing fertiliser shortages next year because of failing Chinese output as China is battling with high energy costs. This has prompted global food prices to become the highest they have in 10 years.


Picture credit: Syed Rifat Hossain


The situation for Sri Lankan farmers however is much more challenging. Due to mounting concerns of low foreign reserves and the pressure to pay back billions of dollars in debt, the government took action by banning “non-essential imports”, chemical fertilisers being one of them. The government also argued that the decision will help local producers of fertiliser thrive and improve the overall health of the country as chemical fertiliser is harmful if overused. Local farmers also agreed that this was a good idea to implement.


However, the process was poorly executed and created a sudden fertiliser shortage in the country, leaving rural farmers unable to grow their crops in time and at scale. This threatens not only the supply of food in the county, but also the wages of these low-income earning farmers. Farmers in Sri Lanka now not only have to battle the global fertiliser price hikes but also a local shortage of fertiliser in the country.


October 18th 2021 | 12:10 PM


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