FAO: Fertiliser Costs Could Prolong Global Food Crisis

Spiralling costs for farm inputs like fertilizer could deter growers from expanding production and worsen food security in poorer countries facing record import bills, the United Nations’ food agency said on Thursday.


An index of input costs for farmers was running at a record high and had climbed more steeply than food prices in the past year, suggesting low prices in real terms for many farmers, the Food and Agriculture Organization (FAO) said in a report.

“The findings do not augur well for a market-led supply response that could conceivably rein in further increases in food prices for the 2022/23 season and possibly the next,” FAO said.

Current food price volatility started last June when Communist China banned fertilizers exports pushing price to the decade records' high. Although Beijing said that it imposed one-year ban, it is unclear whether it would remove it in three weeks.

But mounting input costs, linked to high energy prices and supply disruption caused by Russia’s invasion of Ukraine, have coincided with record food prices this year as measured by FAO’s global food commodity index.

High prices are expected to push up the global food import bill by nearly 3 per cent this year to a record $1.8 trillion, FAO forecast.

However, many developing countries were expected to reduce volumes of imported food in response to rising prices, with FAO projecting least-developed countries would cut volumes so sharply as to lower their overall import bill.

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