Indonesia warns not to underestimate the fertilizer problem or the food supply crisis in 2023

The G20 Summit in Indonesia officially opened on Tuesday. As the host, Indonesian Prime Minister Dzokovido started with the food issue and clarified the crisis to be dealt with globally in 2023.

He said that we should not underestimate the problem of fertilizer. If we do not take immediate measures to ensure that there is a proper price of fertilizer on the market, the year 2023 will be even worse. The current high food prices will further worsen into a food supply crisis, and the shortage of chemical fertilizers will lead to crop failures around the world.

In addition, he called on leaders of rich countries across the country to unite on economic issues and help the world economy recover. He stressed that there was no other choice but to cooperate to save the world, and the G20 must become a catalyst for inclusive economic recovery.

Food problem

Since the Russian Ukrainian war, due to the blockade of the main ports of the Black Sea, an important food trade channel, most of Ukraine's food could not be transported out of its territory, resulting in a tightening of global food supply and a rise in prices.

In late July this year, Russia and Ukraine signed an agreement on the delivery of Ukrainian grain under the mediation of the United Nations and Türkiye. However, due to the escalation of the conflict, the agreement is facing the dilemma that it cannot be extended.

According to the provisional agreement, the deadline for Ukraine to export grain through the Black Sea will expire on November 19. On Monday, UN Secretary General Guterres hoped to extend the deadline, saying that the arrangement was critical to food security.

In addition to grain, the fertilizer market also has frequent problems. As one of the largest fertilizer suppliers in the world, Russia's fertilizer exports have been greatly affected by sanctions imposed by other countries. Many shipping companies refuse to transport Russian goods for fear of sanctions.

Countries that rely on imported fertilizers, such as Brazil, are also major producers and suppliers of global food. According to the International Federation of Fertilizer Industries (IFA), in 2022, the global fertilizer input will be reduced by up to 7% compared with last year, especially in Asia and Africa.

More intuitively, IFA estimates that the global yield reduction rate of corn, rice and wheat will reach 1.4%, 1.5% and 3.1% in 2022 compared with last year.

G20 is still negotiating

The United Nations warned before the G20 meeting that the termination of the agreement on the export of grain from the Black Sea could have a chain reaction on food prices, supply and security in many parts of the world.

Boubaker Ben Belhassen, head of the trade and market department of the FAO, said that in the short term, food prices will certainly respond, and prices should rise, especially wheat, corn and sunflower seed oil.

UN Secretary General Guterres called on G20 countries to update the Black Sea Grain Initiative at the summit and ensure that Russian food and fertilizer can enter the global market.

G20 member countries account for more than 80% of global GDP, 75% of international trade and 60% of the world's population. Therefore, the cooperation of G20 countries is crucial to global economic development.

However, according to a senior Indonesian official, the G20 negotiations on the joint statement are nearing the end, but we are still unable to commit to anything.

Many western countries have tried to isolate Russia, but they have not received the support of all countries. Officials of the International Crisis Group warned that if Western countries only wanted to condemn Russia, they would find that many non Western countries would not cooperate.