UN Warns of Food Risks From Fertilizer, Energy Trade Curbs

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(Bloomberg) — The United Nations urged countries not to limit shipments of energy and fertilizers as the conflict in the Middle East deepens, warning that such restrictions in the past have exacerbated spikes in global food prices.

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The UN’s Food and Agriculture Organization said farm inputs must start flowing through the Strait of Hormuz “as soon as possible” to avoid a worsening of the current situation. It called on all countries to take actions, including to “closely ponder” biofuel mandates and “avoid export restrictions” on energy and fertilizers. 

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“We are in an input crisis; we don’t want to make it a catastrophe,” said David Laborde, director of FAO’s Agrifood Economics Division. “The difference depends on the actions we take.”

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The increased urgency comes as trade through the Strait of Hormuz has largely stalled since the war began in late February, and could be entirely choked off as the Trump administration began a full naval blockade. About a third of global fertilizer supplies pass through the major passageway. 

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Nations have already been racing to protect fertilizer supplies for their farmers, with top producers restricting exports while buyers create financing programs and pay premiums to compete for limited products.

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China is slated to halt exports of sulfuric acid from May, Bloomberg reported last week, and the country prior to the conflict had already been curbing phosphate exports to protect domestic supplies. Russia too has temporarily suspended exports of ammonium nitrate, a form of nitrogen fertilizer.

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“The clock is ticking,” said FAO Chief Economist Maximo Torero, noting that poorer countries are most vulnerable from more expensive and harder-to-find inputs.

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The agency is also asking international institutions like the International Monetary Fund to consider financing countries at risk of losing access to fertilizer supplies. The FAO said it has developed a list of countries based on the timing of crop planting seasons and the quantities required.

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While the FAO Food Price Index was stable in March, pressure is expected to deepen as farmers adjust planting decisions in line with fertilizer availability, the agency said.

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Middle East spot prices for granular urea, a form of nitrogen fertilizer, have jumped 70% since the conflict began, according to data from Bloomberg Green Markets. The lengthening of the war is also threatening phosphate fertilizers, whose global production depends on sulfur supplies from the Gulf region. 

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