The head of the world's largest fertilizer company, Yara International, has warned that the war on Iran could have 'dramatic consequences', causing food shortages and price rises in some of Africa's poorest and most vulnerable communities.

Svein Tore Holsether, chief executive of Yara International, said world leaders need to guard against soaring prices and shortages of fertilizer causing a de facto global auction that would leave the poorest countries, particularly in Africa, scrambling for supplies they cannot afford.

'The most important thing we can do now is raise the alarm on what we are seeing right now – that there is a risk of a global auction on fertilizer that means it becomes unaffordable for those most vulnerable,' he said.

Yara International is a Norwegian multinational with plants in 60 countries and sales in 140. Holsether stopped short of predicting actual food shortages in parts of Africa but said he was in London to draw attention of world leaders to the possibility of things spiraling before action is taken.

Financial intelligence company S&P Global said the impact of the war is already deepening into supply chains. Chris Rogers, head of supply chain research at S&P Global Market Intelligence, noted that Africa's dependence on Middle East nitrogenous fertilizers is high, with Ethiopia and Kenya heavily exposed in sub-Saharan Africa.

With 35% of the world's supply of urea, a key ingredient in fertilizer, coming from Gulf states, Yara has already seen supplies choked and the price of urea up by between 60% and 70% since the US and Israel launched their war on Iran at the end of February.

The increase in price 'has some rather dramatic consequences for those that cannot afford them', Holsether said. Supplies of ammonia, a foundational raw material for nitrogen-based fertilizers, have also been disrupted by the war. Ammonia is toxic, and keeping inventories in war is so risky that some countries like Qatar have suspended production entirely.

'We are losing production every day. It will take weeks or months to restart,' Holsether said in relation to general fertilizer production.

The EU has already taken action to help farmers, including loosening state subsidy rules and providing grant aid of up to €50,000 per farmer for extra fuel or fertilizer costs caused by the war on Iran. But in Africa, those supports do not exist. Farmers there also start from a point of compromised soil health and lack of food reserves.

'In Europe soil conditions and farming are quite optimized already, so farmers are able to reduce fertilizer consumption somewhat without dramatic consequences on the yield,' Holsether said. 'But that's not the same in other parts of the world. You are under-fertilizing to begin with. Africa, that's where I'm most worried right now. Yet again, we are in a situation where the most vulnerable will pay the highest price.'

Source: www.theguardian.com