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Can Manure Make A Comeback Now That Fertiliser Prices Are Skyrocketing?
Can Manure Make A Comeback Now That Fertiliser Prices Are Skyrocketing?
are skyrocketing?
Many people are unaware that the world is about to become very hungry
Deepika Thapliyal, Deputy Managing Editor at ICIS, was surprised to see the data pouring in
about fertiliser prices as everyone was celebrating Christmas and New Year. She posted on
LinkedIn that it was something she had "not seen in her 10-year career as a fertiliser price
reporter." She was in for another shock by March 2022 as:
2021 came to a close, urea prices were already breaking records, and the Russia-
Ukraine conflict pushed fertiliser prices into the stratosphere by mid-March 2022.
"The food crisis is only getting worse as fertiliser prices hit new highs, with urea and
ammonia now exceeding $1,100 per tonne FOB as gas prices soar.
Few people understood the implications of this development in a world where Bitcoin
prices are becoming more popular. However, as inflation bites and ordinary people
feel the pinch, the unglamorous world of fertiliser prices now foreshadows far more
serious issues, as these costs have a direct impact on farming.
Remember that we already live in a world where supply chain issues and climate
change are wreaking havoc on food grain harvests and transportation.
The Boston Consulting Group offered a more candid assessment of the situation.
The war is affecting fertiliser supply chains, resulting in a spike in fertiliser prices
and a drop in fertiliser usage, both of which can have a four-year impact on food
production.
Farmers in net importing and exporting countries are having to rethink their plans.
This includes planting fewer crops, planting crops with lower fertiliser requirements,
or skipping fertilisers entirely.
Because half of the world's population relies on fertiliser-based food, this could harm
the global food supply chain.
Fertilisers would be significantly more expensive than a year ago, according to one
of our studies, putting downward pressure on yields.
Many emerging economies with small farmers would be severely strained. As a result,
food shortages in emerging markets cannot be ruled out in the coming years.
Impact on trade
According to the UN Comtrade database, India imported $9.12 billion worth of fertilisers in
2021, representing a 27 per cent increase year over year. The main types of fertiliser
imports have been moving north. Urea topped the list, with 98.28 lakh tonnes imported in
2020-21, up from 91.23 lakh tonnes in 2019-20; diammonium phosphate (DAP) increased
marginally to 48.82 lakh tonnes from 48.70 lakh tonnes; muriate of potash (MoP) increased
to 42.27 lakh tonnes from 36.70 lakh tonnes, and NPK fertilisers' import value increased to
13.90 lakh tonnes from 7.46 lakh tonnes. The most commonly used fertilisers in India are
urea and DAP.
According to World Bank data, the country's fertiliser consumption increased from
12.4 kilogrammes per hectare in 1969 to 175 kilogrammes per hectare in 2018.
This 5.96 per cent average annual growth rate is among the highest in the world,
roughly two times that of Australia and three times that of Ukraine.
Dependence on fertilisers, India imports fertilisers from a variety of countries.
Russia, Belarus, and Ukraine have always been top suppliers because of their
proximity, which allows us to save money. Belarus and Russia, the world's second-
largest potash producers, supply a significant amount of potash to Indian
farmers.
According to UN Comtrade data, India imported fertiliser from three East
European countries in 2021: Russia ($484,774,720), Belarus ($307,845,695), and
Ukraine ($340,101,698). According to Vasudevan, Russia exports 22 per cent of
ammonia, 13 per cent of urea, and about 8% of DAP. Prices for all three fertilisers
have risen significantly.
Is this an indication that organic manure is the way to go for better crops
and a better world?
No, according to experts, not yet in India. The fact supporting this are mentioned below:
1. The idea of replacing chemical-based fertilisers with organic manure, according to the
country's agricultural players, is more idealistic than feasible.
2. According to Aditya Garg, Director of Vi Exports India Pvt Ltd, urea is the
preferred fertiliser among domestic farmers.
3. "DAP is also widely used as a fertiliser. Other countries may be experimenting with
manure, for example. As far as I'm aware, these aren't becoming popular in India. The
reason for this is a lack of mass availability of such products, as well as farmers'
concerns that any such shift would result in lower yields. As a result, everyone is
sticking to urea and other chemical-based solutions," says the rice and wheat
exporter from Delhi.
4. Organic fertilisers fortified with natural minerals have been used to boost crop
yields for decades. Farmers' efforts to grow more Agri produce on less land fueled the
use of chemical fertilisers as economies raced towards commercialisation.
5. While nitrogen-based fertilisers helped farmers increase their yield, studies show
that they have contributed to the climate crisis. Synthetic nitrogen (N) fertilisers
account for 2.4 per cent of global emissions, according to the Institute for Agriculture
and Trade Policy.
6. Green's advantages and disadvantages Chemical fertilisers would be better for the
world. However, there are no signs that governments around the world are taking
steps to reverse this popular trend.
7. Experts also point out that, while organic fertilisers are not subsidised, urea is, owing
to government subsidies, less expensive.
According to Our World in Data, a scientific online publication from the University of
Oxford, nitrogen fertilisers supported 3.5 billion people in 2015 who would otherwise
have died due to a lack of food. Therefore, policy focus is required.
2. Chhatre says start now as the shift to organic fertilisers will take two decades. “In
20 years, we will still be in the same position — may be in a much worse situation
— in terms of environment, soil fertility, water quality and greenhouse gas
emissions.” Besides, he says, India spends a lot of money importing fossil fuels to
make or import chemical fertilisers. That money could be used on organic
fertilisers. In the US and Europe, higher consumption of organic food has led to
more commercially made organic fertilisers.
3. The ISB professor points out that multiple factors worked in sync to spur the trend
in those markets. “It reached that scale due to support for such a policy and also an
increasing customer base willing to pay a premium for such products. In India, we
don't have any policy movement in that direction. It needs to be changed. Doing so
will change the market and the viability question will not arise,” he adds. These
examples show that a suitable policy change can make food and agriculture
problems go away.