Annex to the information note on the negative impact on global food security of sanctions against Belarusian potash fertilizers27.09.2023
Addendum to the information note on the negative impact on global food security of sanctions against Belarusian potash fertilizers, issued as document A/78/351 of the United Nations General Assembly.
Statistics cited by United Nations agencies show that world hunger continues to worsen.
Today, more than ever, joint efforts must be focused as soon as possible on addressing all of the factors that contribute to the spread of hunger.
Belarus had always made a substantial contribution to ensuring global food security. It exports agricultural products and food to more than 100 countries around the world. However, the illegal sanctions policy of Western countries against Belarus is leading to extremely negative consequences for global food security. Belarus, at various levels and forums, has repeatedly drawn attention to the fact that such unilateral coercive measures by Western countries increase food risks.
A report by the Food and Agriculture Organization of the United Nations (FAO) dated 3 July 2023 called for “every effort” to be made “to keep international markets and trade in food and fertilizers open”, and for “supply chains… and all logistics and marketing systems” to be kept operational. The document concluded that despite falling prices, fertilizer affordability continued to be a serious concern, especially in lower-income countries such as in sub-Saharan Africa, reflecting also the cost of shipping and logistics.
An article from the International Food Policy Research Institute (IFPRI) dated 9 March 2023 contains the same conclusion: “Over the course of 2022 and into 2023 international prices eased and fertilizers became more available in global markets, but remained unaffordable in many African countries due to persistently high domestic price inflation. Even without the price pressure, fertilizer prices in Africa are generally higher than in the rest of the world, given the still significant transportation infrastructure and regulatory bottlenecks.”
This conclusion is further supported by the discussion that took place during the United Nations Food Systems Summit +2 Stocktaking Moment held at FAO from 24 to 26 July 2023. Speaking at the special event entitled “Fertilizers: Meeting short-term needs while working towards sustainable solutions”, African countries confirmed the high prices of fertilizers in the region, which they believed significantly limited farmers’ access to them. They stated that there were millions of hungry people in the region. At the same time, European Union representatives did not dispute the existence of unilateral coercive measures against food and fertilizers and their impact on world hunger, but called for other ways to increase global food production, such as innovative technologies and healthy diets.
Potash fertilizer prices and hence availability to farmers in the European market remained extremely high for a long time in 2022, not only well above their historical value for the region but also far behind the downward price trends that had started in other global markets from around July 2022.
According to the Argus agency, the price of granular muriate of potash in Europe had reached €950 per ton by April 2022 and remained above €800 per ton for almost the remainder of 2022. By June 2023, it had fallen to €440 per ton, but was still above the June 2021 level of €215 per ton. At the same time, prices for Brazilian granular muriate of potash (peaking in April 2022 at $1,023 per ton) began actively declining as early as July 2022 ($975 per ton) and had fallen to $530 by the end of 2022.
Potash fertilizer prices in 2023 are therefore higher than in 2021 (the period when the restrictive measures were imposed on Belarusian potash). Despite a slight drop in prices, affordability for farmers, especially in African countries, remains low.
Belarus’ share in Africa’s potash markets
In 2021, 1.8 million tons of potash fertilizers were exported to African countries, including 683,000 tons of Belarusian fertilizers, which accounted for 38 per cent of total physical exports. At the same time, the Belarusian Potash Company (BPC joint stock company) was the sole supplier of potash to a number of African countries, including Chad, Gabon, Madagascar, Sierra Leone and Zambia, and the market share of the BPC joint stock company exceeded 90 per cent in other countries such as Cameroon, the United Republic of Tanzania and Zimbabwe.
Analysis of African customs statistics data indicates a significant decline in potassium chloride imports after 2021. For example, in the first five months of 2022 and 2023, Morocco imported 55.4 and 52.3 thousand tons of potassium chloride, respectively. In the same period of 2021, 206.6 thousand tons of potassium chloride were imported. Such a significant decrease in the imports of this commodity very likely occurred as a result of the BPC joint stock company being removed as a supplier.
Of the 1.8 million tons of potash fertilizer supplied to African countries in 2021, only 218,000 tons were supplied cumulatively from the European Union (Germany, Spain and the United Kingdom) and Israel, representing no more than 12 per cent. The remainder came from Belarus (38 per cent), Jordan (20 per cent), Russia (20 per cent), Chile (6 per cent) and Canada (5 per cent).
The importance of potash in agriculture
Fertilizer supply and its affordability affect crop yields.
A World Bank report states that “crops…. dependent directly on fertilizer”.
Potash is directly responsible for the productivity (yield) of crops.4 If potash is insufficient, it reduces plant growth and lowers yields. Furthermore, as noted in the IFPRI article dated 9 March 2023, the potential impact of reduced potash use on crop yields and on soil health may take several years to materialize.
Potash is the nutrient that increases plant resistance to various stresses, including climatic stresses: drought, high temperatures, frost, overwatering, pests and diseases, and soil salinity.
As stated in a European Union document, potash is one of three essential macronutrients required for plant growth and currently has no cost-effective substitutes.
Maximum crop yields can only be obtained with the balanced application of nitrogen, phosphorus and potash fertilizers, in scientifically established doses. Excluding at least one of these three basic elements from the fertilizer system will result in lower yields and consequently have a negative impact on production and food security.
The current shortage of potash fertilizer on global markets is reducing crop yields, which could cause food prices to spike.
European Union documents state that the European Union is keen to prevent its sanctions from affecting food security. To that end, quotas have been set for the supply of Russian potash to the European Union and official explanations have been given that its supply to third countries, including transit through the European Union, should not be hindered in any way.
However, the European Union sanctions against Belarusian potash introduced in 2021 do not have any exemptions, which directly affects the global potash trade.
The European Union High Representative for Foreign Affairs and Security Policy, Joseph Borrell, acknowledged that sanctions on the export of potash, taken against Belarus before the war, “can affect the dissemination of the product around the world”, and that the European Union was “listening to concerns from some African leaders about the consequences” of its sanctions.
Growth opportunities for the global potash fertilizer market
According to statistics from the International Fertilizer Association (IFA), global potash production in 2022 was 60.7 million tons and decreased by 12.4 million tons or 17 per cent compared to 2021. In its June 2023 forecast, IFA estimated that global potash production could grow by 16.9 per cent from 2023 to 2027 relative to 2022 levels. At the same time, potash capacity was expected to increase by 11.2 per cent.
According to data from the United States Geological Survey Mineral Commodity Summaries, most of the growth will come from new mines and projects in Belarus, Canada and Russia.
New mines will be developed in Australia and Eritrea. A polyhalite mine (raw material for fertilizer production) in the United Kingdom will also contribute to capacity expansion. New mines in Brazil, Canada, Ethiopia, Morocco, Spain and the United States are not scheduled to come online until 2025.
From these facts we can conclude that it will not be possible to make up for the Belarusian potash no longer entering the market in 2023 and 2024 as a result of the current restrictive measures.
Belarus calls for the rejection of unilateral coercive measures against Belarusian potash, which not only have a negative impact on global food security and contravene international obligations, including within the framework of the implementation of the 2030 Agenda for Sustainable Development, but also run counter to the provisions of the Charter of the United Nations and relevant General Assembly resolutions.