The European Commission’s first response to the crisis on the fertiliser market “lacks concrete short-term actions” according to Copa Cogeca, which represents millionsof European farmers.
It has stated that the Russian invasion of Ukraine has disrupted many markets and value chains globally.
“Besides the energy and agricultural commodities that have been widely analysed and commented on, there is another market where the war is highly impacting European agriculture, namely fertilisers,” the group said.
“Crises in the fertiliser market differ in their nature but their effects are cumulative for farmers.
“Fertilisers are a major input in crop production, especially in cereals, oilseeds, and protein crops where they used to account for 17% of overall turnover and 42% of specific costs.”
Copa Cogeca stated that the EU wholesale price for nitrogen solution has seen a 250% rise from January 2021 to February 2022.
“Despite the troubled market, EU growers have been able to source most of the fertilisers needed for this cropping season. However, the extra price we had to pay was not offset by the moderate grain price increase experienced since mid-2021,” Tim Cullinan, Copa vice-president said.
“All my European colleagues are now concerned as their income for the crop year 2022 is likely to shrink dramatically.”
Fertiliser crisis
Since the Russian invasion on February 24, 2022, fertiliser markets are witnessing a new crisis, in the form of a supply shock this time, according to Copa.
Russia, Belarus, and Ukraine have stopped exporting fertilisers.
“As the EU is dependent on fertiliser imports and the three countries together account for 43% of our fertiliser imports, prices have made another jump to unprecedented levels, far above the already high pre-war prices,” Cullinan said.
“The price for nitrogen solution is now 370% above the level of January 2021. The worst is yet to come as supply shortages are expected in the coming season starting in May.
“Insufficient fertilisation will mean a loss of yield for the upcoming harvest,” he added.
European response
Copa Cogeca has said that since February 24, 2022, European authorities have been proactive when it comes to the crisis affecting the energy and grain market.
On March 8 the European Commission published the REPowerEU plan addressing the oil, gas and electricity markets and proposing short-term as well as long-term measures.
On March 23, the commission issued its communication on food security, involving both long-term and immediate measures designed to increase EU food production and support livestock and arable farmers impacted by high input prices.
“So far however, Europe has fallen short of addressing the surge in EU fertiliser prices and the risk of fertiliser shortages, which essentially concern urea, nitrogen solutions, phosphates, and potash,” Cullinan continued.
“Apart from long-term objectives to reduce the EU dependence on imported gas and fertilisers and direct aid to farmers and the fertiliser industry in the short-term, the European Commission’s communication does not address the ongoing structural imbalances in the fertiliser market.
“The EU farming community has been calling for years now for a change. Immediate EU political solutions exist that could be put in place to ease the pressure on EU fertiliser markets,” the Copa vice-president said.
Fertiliser imports
In the medium term, Copa Coegca has said that Europe should of course work to curb its reliance on fertiliser imports.
Measures aiming both at decreasing consumption and developing European fertiliser sources exist but will take time to be established, the group stated.
“We agree with the European Commission that limiting nitrogen needs should be achieved by widely developing precision farming technology while using more efficient plant varieties and legumes (and perhaps other crops in the future) that can perform symbiotic nitrogen fixation from the air.
“On the supply side, Europe should speed up the development of mineral nitrogen fertilisers produced from local green hydrogen, as well as enhanced nutrient recycling from local organic sources (livestock manure, biochar, wastes),” the group stated.
Cullinan added: “Building a long-term European fertiliser policy is key step to limit our reliance on imported farm inputs, increase food chain resilience and improve global food security.
“However, decision makers must also address short-term threats and take immediate, emergency action to facilitate fertiliser imports and avoid predictable shortages of this critical input in the months to come.”