Russia’s dominance of the fertilizer market is being felt by British farmers who are facing sharply rising prices, which is expected to have a major impact on the supply chain and push up grocery prices.
According to the Agriculture and Horticulture Development Board, farmers are paying around £ 1,000 per tonne for ammonium nitrate fertilizer, compared to 7 647 in January and 5 245 in January last year. Prices of urea, phosphate and potash fertilizers have more than doubled.
James Cox, a cultivator in Gloucestershire, says fertilizer was 55 percent of his business costs, but will now be closer to 80 percent. “If I were to pay around £ 36,000 for my fertilizer and now face a 120,000 bill, where would I get that money? We don’t know what the price will be for next year and we all have to decide now to keep it. “
The UK produces about 40 per cent of its own fertilizer. Russia is the world’s largest exporter of fertilizers.
Eurochem, controlled by Russia’s seventh-richest man, Andrei Melnichenko, has been hit by sanctions. Industry experts say the European Commission could now use consolidation controls to block the capture of Borealis, Eurochem’s proposed nitrogen fertilizer producer, which could further enhance Russia’s position.
Melnichenko was among Russian business leaders approved by the EU yesterday along with Andrei Guriev, chief executive of FosAgro, Europe’s largest producer of phosphate-based fertilizers, and Dmitry Mazepin, a majority shareholder in rival fertilizer company Uralchem.
Prices are expected to rise further as a result of the ban.
Norway’s Yara, one of the world’s largest fertilizer manufacturers, said yesterday that rising natural gas prices would reduce ammonia and urea output in Italy and France.
Sven Torre Holsether, chief executive, warned this week: “It’s not about whether we’re heading for a global food crisis, it’s about how big the crisis will be.”