I feel almost a compulsion to scream from the rooftops that we're barrelling towards the starvation of millions of people, or a series of developing world tragedies sparked by food and energy scarcity.
Planting season is about to start in the northern hemisphere and CRU today reported that its fertilizer index hit an all-time high.
The notes that nitrogen broke its record weeks ago, potash more recently and that they think phosphate will do so in the coming next, with further gains to come for all of them.
Demand destruction is starting as farmers reel from sticker shock. Brazil now says it is targeting reducing fertilizer usage by 20% for the 2022/23 growing season. Expect farmers elsewhere to try to do the same. Of course, less fertilizer means a lower harvest.
Ukraine just announced that it may cut its spring planting area to 7 million hectares from 15 million due to hostilities. Ukraine and Russia combine for about a quarter of global wheat production.
On top of that, there has been a drought in Argentina and precipitation levels have been low in Europe.
A key input in fertilizer is natural gas and that's in short supply with nitrogen production in parts of Europe being curtailed.
So much political effort is being forced into the war right now that we're running out of time to take action to solve this. For one, the US is gearing up to plant far more corn that it needs with much of it going into ethanol. Every effort should be made to redirect that towards wheat, with whatever subsidies are necessary to keep the world supplied. Other wealthy countries can do the same.
Then we have to pray there's good weather for this growing season. Signs so far aren't great with the US NOAA warning about that drought conditions are in play in 60% of the US. Chinese officials are already warning about poor crops as well.
I'm certainly not an agricultural analyst but I'm certain that high prices of commodities will cause immense suffering in impoverished parts of the world and lead to instability and further suffering as a result.
Christophe Barraud has more on the looming crisis.
