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According to the chamber, there’s a looming global fertiliser crisis that will lead to a hike in food prices in the first quarter of 2022. In a press release, it indicated that governments’ interference plays a role in this global crisis.
“The fertiliser space has become very scary at the moment, as it becomes scarcer, especially as governments get in the way. Robust demand puts the future of food production at greater risk and Ghana is not immune from this threat,” it read.
It revealed that food security and agricultural gains are at risk and is due to the increase in gas prices. The statement stated that fertilizer is currently in short supply, “especially fertilisers of the synthetic variety, primarily due to the soaring gas prices.”
“Soaring natural gas prices have forced the closure of two large UK fertiliser plants, sparking warnings of a looming shortage of ammonium nitrate that could hit food supplies as record energy prices start to reverberate through the global economy. At those rates, it is costing fertiliser manufacturers a lot more to produce, and they cannot purchase natural gas at the current price to produce and make a profit.”
This has led major exporting countries like China and Russia to reduce their exports or hold onto their supply. China has banned the export of phosphate, a major component of commercial fertiliser, through 2022. Russia will also only permit 5.9 million metric tons of nitrogen fertiliser and 5.35 metric tons of fertilisers exported in the next six months.
Implications on Ghana’s food system
The Chamber said food inflation is imminent, adding, as a net importer of fertiliser with no manufacturing capacity, the shortage is expected to drive up fertiliser prices, a major component of farmers’ crop budget.
Food prices, especially grains and cereals are expected to increase significantly from the first quarter of 2022 through to the second quarter of 2023. Cereals and grains will see a surge between 30 and 45 percent.
Crops yield for the 2022 season is also expected to remain stable or decline relative to 2021. The high cost of fertiliser the Chamber said will likely ration fertiliser use and or reduce area cultivated by commercial and smallholder farmers.
Again, total food production, especially grains and cereals is likely to miss the projected growth target in the 2022 season.
Key Recommendations:
The Chamber of Agribusiness further recommended that the Ministry of Food and Agriculture partners with the Ministry of Trade and Industry to urgently facilitate procurement of fertiliser and agrochemicals for the 2022 and 2023 seasons as well as review of the input subsidy to extend through to 2022.\
It also called for the support and promotion of the production and use of organic fertiliser as well as expedite steps to start synthetic fertiliser production in Ghana.
