Open food and fertilizer markets are a critical source of resilience during global food crises. The experience of 2022-23 showed that while trade and supply chains adapted to severe shocks, policy interventions that restricted trade amplified market pressures.
Higher oil and gas prices are once again raising concerns about fertilizer costs. The events of 2022 provide a reminder of how energy markets, fertilizer markets and trade policy can interact during a global crisis.
In 2022, overlapping shocks caused by Russia’s invasion of Ukraine, economic fallout from the pandemic, and extreme weather events led to soaring food prices that pushed more than a quarter of a billion people globally to acute levels of hunger.
Grain, energy, and fertilizer markets had all suffered shocks simultaneously, with the world’s poorest countries, many in Sub-Saharan Africa, most severely affected due to their high vulnerability. Natural gas is the critical input used to produce ammonia, which is then processed into urea, the world’s most widely used nitrogen fertilizer. As natural gas prices surged, fertilizer production costs rose sharply.
read more: https://blogs.worldbank.org/en/trade/why-open-markets-matter-for-global-food-system-resilience
