(Bloomberg) — More price hikes for fertilizer — and consequently, food — are on the horizon as escalating tensions between Russia and Ukraine add to fears of global shortages.
Russia is a low-cost, high-volume global producer for all major fertilizers, and it’s the world’s second-largest producer after Canada of potash, a key nutrient used on major commodity crops and produce. The conflict in the region could disrupt trade flows. U.S.-based Mosaic Co., a major fertilizer producer, warned of shortages in a call with analysts Wednesday.
It all points to rising costs for farmers, who are scaling back on fertilizer use. That will potentially trigger lower crop yields and push prices for food even higher around the world. Food costs are already the most expensive in a decade, according to a United Nations gauge.
“Fertilizer prices are at all time highs, this is really just adding more pressure,” said Patrick Donnelly, senior analyst at Third Bridge. “It’s a very real possibility we see shortages for this coming year especially heading into the North American growing season.”
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