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Fertilizers play an important role in agricultural production, and their absence affects the crop yield and food supply chain. Since the last few years, the fertilizer supply chain has been facing major issues in the supply of fertilizers. From 2022, the farmers have dealt with a lot of supply chain issues.
In this article, I’ll share insights on fertilizer supply chain issues that arose between 2022 and 2023. Moreover, the ways for dealing with supply chain issues are also mentioned in the last section.
After the Russian-Ukraine war, the fertilizer chain supply disruptions were observed clearly and increased in 2022. Due to this, the prices for fertilizers were also raised and they became costly. However, according to World Bank reports, overall fertilizer costs will decline soon. However, the prices are still very high in comparison to 2015-2019.
According to the reports of the World Bank, the costs of fertilizers will move downward at the end of 2024. However, besides this, the price index will still remain at high levels.
From 2022 to 2023, the fertilizer supply chain faces many challenges. Some of these challenges are as follows:
The Russian war in Ukraine also raised many problems. Russia is one of the biggest fertilizer exports. They stopped their fertilizers from being exported in 2022. Moreover, there are the problems of trade restrictions and transportation interruptions going onward.
Russia and Belarus sanctioned and ceased fertilizer supplies.
They are the ones that produce the highest quantities of phosphate, potash, & nitrogen fertilizers. Globally, both of these supply 40% of the potash fertilizers. However, after the war, the USA and other countries imposed sanctions on the exports and imports of Russia and Belarus. Due to this, the fertilizer supply chain becomes highly affected. After sanctions, they stopped exporting their fertilizers.
Fertilizer trade challenges
Fertilizers are also selling at high prices due to trade challenges. In 2023, the prices for some of the fertilizers will fall. However, in the global market, the trend and uncertainty for fertilizer prices continue. The suppliers start to take more profits from the trading. That results in high prices for the farmers.
Labor availability and transportation costs
In the agriculture industry, the main factors contributing to supply chain issues are transportation problems and labor availability. Their unavailability or high costs directly disrupt the fertilizer supply chain.
China ceased fertilizer exports.
Along with Russia and Belarus, China is also one of the major fertilizer-producing countries. It was the second-largest fertilizer exporter. China was also known for its exporting fertilizers. However, they ceased fertilizer exports in 2021. They do it for the domestic use of fertilizers. Due to this, within the period of 2022–2023, a fall in the availability of fertilizers was seen & this is for most of the countries.
Fertilizer prices, low output yields, and high prices of food
The quantity and quality of the input fertilizers directly affect the output. Fertilizers are the most important supplement & ingredient for yield. However, the overall prices of the fertilizer and the yield offers are equal to or show relatively low output results. When the output is low & not up to expected results, the prices for food rise. These factors disturb the food and supply chain completely during 2022–2023.
Global high prices of natural gas availability
Globally, the high cost of natural gas is a challenging factor in the fertilizer supply chain. In the fertilizer industry, it changes the production rate of the fertilizers or affects the prices. As a result, the high cost of natural gas results in costly fertilizer productivity. That directly leads to a high price challenge in the markets.
High input costs for fertilizers
Overall, fertilizers are produced using different components, which makes the input costs high. Due to this, the inventories can’t sell their fertilizers at low costs, which results in high prices. Due to this, the purchase rate of fertilizers also decreases among the farmers’. Moreover, high demand and low presence of Fertilizers disturbs the overall supply chains of fertilizers.
Fertilizers Supply chain interruption due to COVID-19
COVID-19 reflects a high impact on the supply chain. As a result, the economic conditions of the countries were disturbed, which is why the prices of natural gas increased. That is directly affecting the costs of fertilizers.
Some of the ways and managing fertilizer supply chain methods can be as follows:
Reduced the amount of synthetic Fertilizers in the agriculture industry
It’s better to minimize the input quantity of the fertilizer in the agricultural crops over time. Each year, farmers can try to slightly minimize the fertilizer availability to the crops. It is an affordable and healthy practice. Moreover, it shows a positive impact on the environment.
Invest in innovations and technologies.
With the use of technology, the need for fertilizers can be minimized. Moreover, techniques can be used and made to develop the best practices. The technology will be helpful in determining the exact amount and requirements of the fertilizers according to the soil. For example, fertilization and precision agriculture are examples.
Countries need to lift export bans on fertilizers.
The countries need to remove the ban on some countries or they need to find alternative fertilizer supply options.
Increase the use of organic fertilizers
Through the application of organic fertilizers, the supply chain issues can be resolved. The requirement rate for fertilizers depends on the soil type. Farmers can switch to using more organic fertilizers in their crops. They can use it with a combination of small amounts of synthetic fertilizers.
The fertilizers supply chain has been in a challenging position for the last few years. Many factors are present on the back of it. According to Reports, the prices of fertilizers will go down in 2024. However, the price rates will still be high. From 2022 to 2023, there are many challenges that the fertilizer supply chain is facing due to oil prices, cease-exporting, war, high natural gas prices, and other factors. However, through the use of proper plans the need for fertilizers can be managed in the future.
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