As in many parts of the world, current crops in Eastern Europe have suffered from a fertilizer crisis – and it could be worse.
That’s according to Hungarian producer Nitrogenmuvek Zrt, which sees a 15 to 20 percent drop in grain yields this year in a region that includes big European exporters Romania and Poland.
Farmers have reduced nutrient use due to high prices and supply problems, at a time when drought has also threatened crops. Fertilizers have become more expensive as a rally in natural gas – a key commodity – has pushed up costs and reduced production.
Sanctions on Belarusian potash and China’s attempt to curb supplies have compounded the crisis. This in turn threatens global crop supplies strained by the war in the breadbasket nation of Ukraine.
Maybe there won’t be much relief any time soon. Concerns remain about an ongoing gas crisis in Europe, which would be bad news for nutrient production.
“The winter is going to be extreme, everyone in the industry assumes there will be no gas supply,” said Zoltan Bige, Nitrogenmuvek’s chief strategy officer.
Crop yields could fall further across Europe as the current season will be the first fully war-affected season, he said.
Another problem is that nitrate-based fertilizers, which are preferred in Europe, cannot be replaced by urea-based fertilizers produced elsewhere, he said.
The Hungarian government said last week the country’s wheat harvest could fall below four million tonnes, down about a third from the five-year average.
If European farmers continue to skimp on fertilizers, it will jeopardize crops to be planted in the autumn for the 2023 harvest.
High gas prices pose a “critical” threat to Europe’s fertilizer industry, industry group Fertilizers Europe said earlier this month. Nitrogenmuvek itself could use up its liquidity buffer in the next month and a half.
“We will not have a reserve for a possible negative scenario such as a further increase in gas prices or possible unplanned maintenance,” Bige said.
Nitrogenmuvek is currently running at full capacity of around 4,000 tonnes per day, despite recent increases in gas prices as it tries to make up deficits caused by shutdowns earlier this year.
Production is likely to fall 10 percent this year even if the situation stays as it is.
The big question is how gas costs and supplies will be affected
Fertilizer production later in the year. “With gas prices in recent weeks, it wouldn’t even be worth producing,” Bige added. (Blumberg)
https://www.independent.ie/business/irish/fertiliser-woes-could-get-worse-warning-41844762.html Fertilizer problems could get worse – warning