Fertiliser maker Yara says world faces extreme food supply shock -Breaking
By Dmitry Zhdannikov
DAVOS. Switzerland (Reuters). Yara, the Norwegian fertiliser company, says that donor urgently needs to plug U.N.’s $10 Billion food program funding gap. It is necessary to do so to avoid a global catastrophe. The sanctions on Russia’s fertilisers and Ukraine’s problems with grain exports have created a shockwave in the world.
Svein Tore Hosether, chief executive officer of Yara International (OTC), one of the most important suppliers of plant nutrients in the world, stated that the “world has realised” that food can become a weapon. He made the remarks to Reuters while speaking at the World Economic Forum, Davos.
According to him, the Russian sanctions had a direct effect of at least 15% reduction in global fertilizer supply. The indirect effects of disruptions in supply chains and gas price increases were even worse.
We need to create an emergency plan for the most vulnerable. He said that urgent funds must be accessed by the WFP, which currently has $10 billion in funding gaps.
David Beasley was the UN World Food Programme’s executive director.
WFP may face $10 billion in fund deficiency due to rising food, fuel and shipping prices. Donors such as the oil-rich Gulf nations aren’t contributing funds.
Due to the conflict in Ukraine, 25 million tonnes worth of corn and grain are stuck at Black Sea ports. Russian fertilisers and grains exports have also been affected by the sanctions.
Holsether stated, “At the moment, there is an extreme combination event when food supplies, fertilisers and gas supplies are falling, prices are increasing for fertilisers and gas, and they are all going down.”
The EU gets 40% of its gas supplies from Russia, which is a major factor in global fertiliser production.
Due to an increase in gas prices, Yara reduced its ammonia- and urea production in March. However, it has since fully restored production.
Holsether said, “We must build a system less dependent upon Russia and that’s more sustainable including the use of renewable energy to fertiliser production.”
UN places over half a billion people in Ethiopia and South Sudan in the worst phase of acute food security.
Africa tends to be the region most affected by natural disasters. Yara donated 18,000 tonnes to Ghana of fertilisers and agreed on another 40,000 tonnes. We expect that the average cost will drop with this donation.