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21/04/2020

COVID-19: Maintaining the global Access to Fertilizers

is Essential for Food Security and Nutrition

While amidst the COVID situation, food is officially recognized worldwide as an “essential good” for international trade and supply chain measures, it bears emphasis that the production of most of our food is originated on the farm.

Before impacting the end–consumption, supply chain disruptions affect farmers at the very beginning of the food production process: food availability starts at the farm level!

This means that current shortages in essential inputs, such as fertilizers, will have measurable consequences on planting, crop development and the harvest later this year. They will also impact farmers’ income and hence their ability to invest in inputs for the subsequent planting and harvest season(s). Governments, in cooperation with the fertilizer value chain and farmers, need to ensure that the current health crisis does not lead to a food crisis, by maintaining the adequate access to and affordability of fertilizer and other essential inputs. This can only be achieved by prioritizing farm inputs as well as categorizing supply chain services as essential and indispensable.

Indispensable logistics include all activities that enable the flow of agriculture inputs, such as transportation, warehousing, procurement, packaging, inventory management and distribution and retail services as well as all necessary quality controls.

It is further noteworthy, that the insufficient quantity of a single essential plant nutrient affects plant growth and thus the yield, as well as soil health. In vulnerable regions, such as Sub-Saharan Africa where soils are already depleted and desertification is a constant threat, the additional reduced access to fertilizers risks to further damage the soils and worsen the already fragile economic situation of farmers.

Climate change related impacts, that will undoubtably continue to affect farmers worldwide, will aggravate this problem. Assuring that farmers continue to have the relevant and necessary means to adapt to future weather impacts is of utmost importance. To that end, fertilizers play a critical role: Responsible plant nutrition enhances soil health, strengthens tolerance of plants to stresses, and supports enhanced water use efficiency.

Plant health and food quality depend on a well-balanced and adapted plant nutrition, which, in turn, benefits humans and animals when consumed.

As a matter of fact, in this current crisis it is even more imperative not only to remind of fertilizer’s important role for food security (producing enough calories), but also to stress their benefits for human health by helping provide all the essential nutrients that the human body requires:

While it is widely accepted that, without fertilizers, the current global agricultural output would be halved, scientific evidence also demonstrates that plant nutrient management can increase the health–promoting components of plant-based food and feed. As plants are the primary source of nutrients for humans and animals, there is a direct and indirect link between mineral macro-and micronutrient application to plants and animal and human nutrition: Human nutrition is not only dependent on crop production, but also on the nutrient density and quality of the plants consumed directly (or indirectly through animals).

In this sense, fertilizers do not only contribute to the supply of calories, but are also essential nutrients for human health (see text box below): 

Bearing this in mind, governments and local authorities are called upon to

 

  1. Include fertilizers and other key farm inputs on the list of essential goods for food security and nutrition.

  2. Create actively local conditions to keep global supply and trade open, by eliminating any trade restrictive measures (even it if it is just on a temporary basis), by putting into place more flexibility to overcome faster and more effectively barriers to trade, reduced workforce and delays in ports and customs.

  3. Create an enabling environment to help the fertilizer value chain play its critical role of delivering fertilizers to farmers.

  4. Work closely with the fertilizer value chain to address swiftly any unforeseen issues and develop solutions and partnerships to unlock the situation.

  5. Listen to its farmers, cooperatives and food producers to understand where major problems occur and set up “emergency government response services”.

  6. Facilitate financing and access to affordable credits by actors along the fertilizer value chain and farmers.

Fertilizers are not only food for crops, but support indirectly human dietary requirements:

Potassium (К) is essential for plants, animals and people for normal life and activity. Plants absorb more potassium than other nutriens, including nitrogen and phosphorus. 

Potassium supports the normal functioning of organs and all systems of human body, it benefits musculoskeletal and nervous systems also stimulating brain activity. Food rich in potassium is beneficial for the heart and vessels. WHO recommends an increase in potassium intake from food to reduce blood pressure and risk of cardiovascular disease, stroke and coronary heart disease in adults. Potassium is used in treatment and prevention of civilizational diseases like obesity and diabetes. Potassium is an ideal element for a low-calorie diet for weight loss and intensive physical exercise that helps prevent exhaustion and chronic fatigue, and is particularly recommended for children, pregnant women and elderly people. 

Nitrogen (N) is a key component of proteins; plants provide on average 30% of protein intake to human diets.

Phosphorus (P) is needed by crops, animals and humans for their enzyme and energy production and transport.

Potassium (K) applications increase the K content in all organs of plants, including its edible parts, and contribute ultimately to make fruits and vegetables an essential K source for our diets. K has a positive impact on blood pressure.

Magnesium(Mg) is distributed throughout plants, including the grain, subsequently, it is present in vegetables, grains and nuts consumed in human diets. Mg supports our muscles and nerve functions.

In addition, micronutrients, such as zinc(Zn) or iron (Fe), are essential for human health by supporting physical and cognitive development. They also strengthen our immune system, thus help improve our natural resilience to viruses. Zinc, for example, is known to support antiviral immunity.

Governments have to assure that the COVID crisis does not aggravate deficiencies in these and other nutrients by preventing the necessary fertilizer applications.

31/10/2018

15/05/2017

The situation turns around. BPC enhanced exports in 2016 and is fully committed in Q1 2017. 

The previous year was complicated for producers and exporters of all commodities. However, in mid-2016 potash producers and exporters seemed to have bottomed out. Nevertheless, prices remained weak. Resulting from these developments, in 2016 YoY revenues of BPC declined by 23% versus 2015. The exports of Belarusian potash fertilizers totaled at 9.5 mln tons, versus 9.2 mln tons in 2015.

The situation is complicated while the trend is positive

The positive momentum of the commodity market alongside with the smart policy of producers and exporters enabled to bottom out in the mid-year and upon settling the Chinese contract, to gradually increase potash prices leaving demand and consumption intact”, according to BPC in the comment to tut.by.

“H1 was a complicated period for the global potash market, while in H2 the situation leveled out step by step. As of February 2017, BPC managed to increase prices in Latin America, particularly in Brazil, US, SEA, Europe, and Africa, while maintaining leadership positions among potash exporters. In our view, the upward trend will continue into the next year” – BPC assumes.

Evaluating the market share of Belarus in the global potash exports, the company explained that the official statistics for 2016 was still pending, but it is thought to be approx. 20%.

At the end of 2016 Mikhail Rusy, the deputy prime-minister of Belarus was highly optimistic in his assessment of the potash market in 2017, forecasting that potash exports would grow as high as approx. 10 mln tons. The exporter believes, 10 mln tons may be a very good benchmark in terms of volumes. «However, in its business operations BPC is guided by the actual market needs and the netbacks from a specific market. If a market requires a certain decline in supply, we respond accordingly” – emphasized the spokesperson of the company.

“Going back specifically to the previous year, in H1 2016, while the Chinese contract was missing, the market situation did not look favorable, with demand remaining weak. In order to meet demand, JSC Belaruskali and BPC cut the output and exports to a greater extent than other suppliers did, having performed as a responsible supplier, exercising a well-reasoned market policy. Moreover, after the market recovery and demand rebound, shipment volumes of Belarusian potash grew again.

In the context of a favorable market situation both the output and exports of JSC Belaruskali and BPC grew higher than those of other major producers, the company notes.

“At this point prices also grew. Looking back on the results of 2016, it should be emphasized that JSC Belaruskali and BPC are the only ones that managed to grow exports in 2016”, according to BPC.

Tight market

Last year BPC took the lead in settling both key contracts with China and India, and experts took a favorable view of this strategy, acknowledging that the timeframe-volume-price combination had a favorable impact on the market. This year BPC expects contracts talks to start in February. “There is a range of factors that govern talks, and all of them are positive. We observe the upward trend in the spot markets in terms of both volumes and pricing. We observe lower inventories in China. Meanwhile, unlike the previous year, BPC is fully committed in Q1”, BPC notes.

“In general this year the global demand-supply situation varies from the previous year. While 2016 saw a significant decline in demand, the situation has reversed now – we see that supply is tight in the market”, the company emphasizes.

As the result, starting from 2017 Belarus recovered an export duty on potash: from October, 1 to December, 31 2015 it had to be lowered down to €45/ton versus €55/ton being previously in effect. It is understood that the budget of Belarus is drawn up based on the assumption of the potash export duty at €55/ton, and in case of a less favorable scenario there would be a risk of losses to the budget income against this revenue item.

A longer-term outlook of the company is favorable, noting that the global potash market is still on the run. According to the preliminary estimate of the International Fertilizer Association (IFA), the global shipments reached 63.3 mln tons in 2016, slightly higher than in 2015 (63.1 mln tons). According to the IFA forecast, in 2017 this figure would grow slightly reaching 64−65 mln tons.

It should be noted that a few large projects are due to be launched in the industry. “Undoubtedly most of them will be implemented. It is yet to be seen when the volumes being declared will be achieved and to what extent a balanced policy of potash producers would enable to grow global potash consumption”, BPC warns. At this point, experts believe, one should keep in mind that potash reserves being mined deplete gradually now and some of the new projects offset retiring capacities. More specifically, the output from the Legacy project, due to be launched in mid-2017 offsets the projected curtailments of potash production by Intrepid that shifts to producing the Trio complex fertilizer, BPC explained.

Other projects most likely to come online in the near future are those of EuroChem. “As far as these projects are concerned, one should consider the following: currently Russia is just tenth in terms of fertilizer consumption, although all kinds of fertilizers are produced in the country. Given the trends of agricultural development, there is a huge potential to increase the domestic consumption of mineral fertilizers in Russia. Therefore, a large volume of output from these projects may be absorbed by the domestic market”, according to BPC.

19/12/2016

19/12/2016

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