Low global grain stocks pushing up fertilizer prices.
Ottawa—The Russian attack on the Ukraine has left farmers in Eastern Canada facing a shortage of nitrogen fertilizer as they ready to plant this year's crop, says Karen Proud, President and CEO of Fertilizer Canada.The fertilizer was already in short supply because rising global grain prices had farmers around the world trying to boost production to meet the demand.“Eastern Canada, which is highly dependent on Russian fertilizer imports, has been disproportionally affected for this spring seeding season,” she told the Commons agriculture committee.Between 660,000 to 680,000 tonnes of nitrogen fertilizer are imported from Russia into eastern Canada annually, which represents between 85 and 90 per cent of the total nitrogen fertilizer used in the region.Canadian tariffs imposed on Russian goods because of the invasion came as between 30 to 40 per cent of the fertilizer ordered for Eastern Canada was either on route or pending shipment. Importers have been able to bring the available supply up to about 70 per cent but planting season is at hand.“Our members have really been scrambling to find supply in order to make sure farmers have access to what they need,” she said. While the Russian product has been able to come in, companies have been looking elsewhere domestically and internationally for supplies.Fertilizer Canada wants to keep talking with the government about the impact the 35 per cent tariff on Russian products has on fertilizer supplies and what the government “can do to ensure that costs are managed and that there's a fair approach to all players along the supply chain.”Clyde Graham, Executive Vice-President of Fertilizer Canada, said fertilizer prices have been strong because global stocks of grains and oilseeds have been low for a time. “That sends an important signal to growers around the world to produce more. The way you produce more food is by using more fertilizer. We've had a surge in demand for fertilizer products on a global basis.”As well, over the last year there have been weather events in the United States that affected production, a nitrogen facility in Western Canada shut for technical reasons and China slashed fertilizer exports to meet its own domestic demand. “Even before the invasion by Russia, the Russian government had restricted exports of fertilizer. Further, the high cost of natural gas in Europe led a major U.K. manufacturer to stop production.The potential loss of Ukraine and Russian crops to the world food supply this year is making people realize how important getting crops planted is around the world every,” Graham said. “It's not just one year that it's critically important, it's every year.”