A study looking into current volatility in the fertilisers market and its impact on agricultural production was issued on November 14, 2022 by the World Trade Organization (WTO) and the UN Food and Agriculture Organization (FAO).

Calling for urgent action to address the fertiliser crisis, the study outlines policy recommendations for G20 governments, highlighting the importance of keeping the fertilisers market open to meet global demand and to avoid a food availability crisis.

Factors such as the war in Ukraine, high inflation, supply chain disruptions and the global economic downturn have led to soaring prices for fertilisers and agricultural products, notes the study, titled “Global fertiliser markets and policies: a joint FAO/WTO mapping exercise”, resulting in limited availability in many countries. The study forecasts that shortages in fertilisers will likely persist into 2023, threatening agricultural production and food security in Africa in particular, where farmers are heavily dependent on imported agricultural inputs.

The study also looks at the measures adopted by WTO members in relation to fertilisers between January 1, 2021 and October 15, 2022 and their impact on the global fertilisers market. The study shows 19 WTO members introduced 41 fertiliser-related measures during this period, with 75 per cent of them in the form of trade policy measures. Export-restrictive measures accounted for as much as 41 per cent of all fertiliser-related measures while increased tariffs and domestic subsidies have placed further upward pressure on international fertiliser prices, especially since late 2021, the study finds.

The study urges G20 governments to deploy all policy measures available to deal with the fertiliser crisis, underlining the need to make “every effort” to keep trade in fertilisers open so that supplies reach the countries in most need of them.

The study recommends, in particular, that G20 governments keep food, feed and fertiliser markets open and minimise disruptions to trade in fertilisers, including refraining from export restrictions inconsistent with WTO rules. It stresses the need to ensure access to fertilisers for the most vulnerable countries, including through mobilising international financial support and leveraging risk management tools, such as fertiliser contract swaps to hedge against extreme price volatility. In addition, it underlines the need to increase market and policy transparency, through G20 members’ timely and complete notifications of trade measures to the WTO and enhanced data and policy monitoring at the FAO and through the G20 Agriculture Market Information System (AMIS).

The study further recommends improving soil fertility and accelerating innovation for more efficient use of fertilisers, with greater use of precision farming practices, reducing fertiliser subsidies, and promoting sustainable and resilient food systems.