The US government is quietly encouraging agricultural and shipping companies to buy and carry more Russian fertilizer, as sanctions fears have led to a sharp drop in supplies, fueling spiraling global food costs.
The effort is part of complex and difficult negotiations underway involving the United Nations to boost deliveries of fertilizer, grain and other farm products from Russia and Ukraine.
The EU and the US have built exemptions into their restrictions on doing business with Russia to allow trade in fertilizer, of which Moscow is a key global supplier. But many shippers, banks and insurers have been staying away from the trade out of fear they could inadvertently fall afoul of the rules. Russian fertilizer exports are down 24% this year.
The discussion between US & Russion earlier this month on the supply issues Inadequate fertilizer deliveries this year could also affect next year’s crops.
Russian inform to US provide assurances to buyers and shippers of its fertilizer and grain that they aren’t subject to sanctions, suggesting it’s a condition of any steps to unblock shipments of Ukrainian farm products now. It’s really important that U.S. authorities send a clear signal that these deals are permitted and in the interest of global food security and they shouldn’t refuse to carry them out,” said Ivan Timofeev, a sanctions specialist at the Kremlin-founded Russian International Affairs Council.
The White House didn’t immediately respond to a request for comment.
While Russia claims that sanctions fears are also holding back its grain exports, total shipments this season are down only 14%, and wheat exports doubled in May, according to the country’s Grain Union. By contrast, more than 25 million tons of grain, sunflower oil and other commodities are stuck in Ukraine because of security fears in the Black Sea ports and shipping lanes traditionally used to carry them to global markets. Officials warn the situation will become more dire with the new harvest beginning.
In 2021, Sri Lanka ban on the use of chemical fertilisers and pesticides, combined with pandemic-induced contraction of the economy and decline in export and tourism earnings, has compelled Sri Lanka to effectively place itself under a state of emergency.
The shortfall comes at a bad time for the island nation of 22 million people. Sri Lanka is in the throes of its worst economic crisis in a decade, foreign exchange reserves are at a record low and inflation is soaring, especially for food.
Rice was selling for Sri Lankan up to 52% higher compare 2020. The ban lead to an annual drop of at least 30% in paddy yields nationwide.
While restrictions on movement to contain the raging COVID epidemic have taken a toll of the economy, the government aggravated the crisis by deciding to completely ban the use of chemicals in agriculture at a cabinet meeting on April 29.
The reason of ban
- The document admitted that the use of chemical fertilisers has led to better harvests but has also contaminated lakes, canals and groundwater.
- Chemical fertilisers have triggered a number of non-communicable diseases
- Sri Lanka imported chemical fertilisers worth $400 million a year. With the ban, it would not only save dollars but could also become the world’s first organic-only state.
Sri Lankan tea production is likely to suffer owing to the government’s policy. The country produces about 300 million kg of tea. It earns about $1.25 billion from tea exports. The output of pepper, cinnamon, vegetables and staples like rice is expected to be crimped. Sri Lankan farmers have been protesting the ban. On August 3, the government allowed imports of certain fertilisers for select users.
Organic agriculture being low-yielding is land intensive. The crops may be resilient but they cannot feed a growing population when cultivable land is shrinking.
Prices for raw materials that constitute the fertilizer market — ammonia, nitrogen, nitrates, phosphates, potash and sulphates increase up 30% since the turn of the year and now exceed those seen during the food and energy crisis in 2008.
Shortages supply fueled by the Ukraine-Russia conflict, along with a host of pre-existing factors, have driven fertilizer prices to record highs.
Russia and Ukraine are among the most important producers of agricultural commodities in the world, with exportable supplies in global foodstuff and fertilizer markets.
In 2021, Russia was the world’s top exporter of nitrogen fertilizers and the second-largest supplier of both potassic and phosphorous fertilizers, according to the U.N. Food and Agriculture Organization.
Trade between Russia and the rest of the world has not stopped, but has been severely disrupted as importers and vessel charterers steer clear of the country in light of the invasion of Ukraine
Russia, which accounts for around 14% of global fertilizer exports, has temporarily suspended outgoing trade, which is expected to have a strong ripple effect across global food markets.
Natural gas is a key input for fertilizer production. High gas prices have resulted in a curtailing of production in regions such as Europe, further constricting an already tight market.
Meanwhile, sanctions on Russian-ally Belarus have substantial implications for the potash market, with Russia and Belarus contributing a combined 40% of annual traded volumes.
Starting 2020, nitrogen fertilizer prices have increased fourfold, while phosphate and potash prices over threefold.
Farmers have benefitted from high agricultural commodity prices, helping to partly offset high input prices, demand destruction is increasingly likely due to high prices and supply shortfalls.
Economies around the world are already dealing with historically high inflation driven largely by soaring food and energy prices. The U.N. Food and Agriculture Index shows food prices are at an all-time high. The suggestion prolonged period of fertilizer shortage will affect longer-term farming yields.
Given the already tight grains and oilseeds market, and the importance of both Russia and Ukraine in those markets, food price inflation is an increasingly prominent risk.
Prior to the threat of reduced supplies from Russia and Belarus, fertilizer prices had already been facing upward pressure from global supply chain disruptions, a Chinese export ban and a Canadian rail strike.
While much of the focus of discussions around price spikes in the wake of Russia’s invasion of Ukraine has been dominated by energy, the supply shock to fertilizer, wheat and other grains is expected to compound the problem.
Indonesia eased pressure on the global vegetable oil market which is hitting peak prices due to the suspension, the war in Ukraine and global warming. Indonesia issued a ban last month on procuring supplies of the commodity, which is used in a range of goods from chocolate distributions to cosmetics, in the face of domestic shortages.
The lift ban based on the supply and condition of cooking oil and given that there are 17 million people in the palm oil industry; farmers and other support workers, cooking oil exports will reopen on Monday, May 23.
Authorities have enforced a strict export ban, with the Indonesian navy seizing a tanker carrying palm oil out of the country in violation of directives earlier this month.
However, Jakarta is under pressure to control prices that have soared after Russia’s invasion of agricultural power, Ukraine.
Palm oil producers staged protests last week in central Jakarta and several cities in Indonesia complaining that oil palm fruit prices had dropped sharply.
The Indonesian leader said he lifted the suspension because domestic supply and cooking oil prices had improved since the ban took effect on April 28.
The price has dropped from 19,800 rupiah (RM5.94) per liter to about 17,200 rupiah (RM5.15) since the ban. Domestic cooking oil supply also tripled after the ban from 64,500 tonnes a month to 211,000 tonnes, he said.
Palm oil is the most widely used vegetable oil in Indonesia and, despite being the world’s largest producer, the country has faced a shortage of cooking oil for months due to weak regulations and producers refusing to sell domestically. The shortage in some cases forces consumers to queue for hours at distribution centers.
Indonesia produces about 60 percent of the world’s palm oil, with a third used by its domestic market. India, China, the European Union and Pakistan are among its major export customers.
Urea fertilizer is made up of 46 percent of nitrogen. Therefore, it is an ideal source of nitrogen for plants. Urea fertilizer is made up of mainly ammonia. In order for effective absorption to occur, a healthy soil microbiota population is needed in the soil. Having a high nitrogen content, urea fertilizer is excellent for plants that require nitrogen to promote green leafy growth and to make plants look lush. Mainly, urea fertilizer is used for bloom growth due to the high nitrogen content without phosphorus and potassium.
Urea fertilizer should not come in contact directly with the seeds. Therefore, it should be applied as a top dressing during sowing period rather than around the seeds. Urea should also be mixed with earth or sand before application in order to avoid over concentration of nitrogen in the soil around the plant.
How is it produced?
Urea is found as a natural component in animals and human urine. This fertilizer is the very first type of organic fertilizer that can be manufactured using chemical processes. In 1828, a discovery was made when potassium cyanate was treated with ammonium, producing urea from the process. Currently, urea fertilizer is produced by the processing of ammonia and carbon dioxide.
Advantages and Disadvantages of Urea Fertilizer
One of the advantages of urea fertilizer is its high content of nutrient along with its ability to increase crop yields by a great amount. Other than that, this type of fertilizer poses no explosion hazard and is easy to handle while having a wide range of application.
On the other hand, soil quality will be degraded when urea is used excessively in the soil. Over a long term of usage, urea fertilizers deplete the soil quality as there is a loss in beneficial soil microbes in the soil. Excessive usage and leaching can also cause adverse effects on the environment.
What is bio-fertilizer and Palm Kernel Shell (PKS)?
Palm kernel shell (PKS) is the portion of the palm seed left behind once the nut is removed for oil production. Previously, before PKS was used as a recyclable source, the shells were merely buried into the soil or burned in order to dispose them. These activities cause pollution to the environment as well as loss to the producers.
How to produce fertilizer from PKS?
Bio-fertilizer from PKS is mainly produced via the pyrolysis process. During the process, the source is treated in reactors with very high temperatures with the absence of oxygen. The product is mainly in solid form. From the pyrolysis, biochar of PKS will be produced. The biochar is later treated with other biomass such as chicken manure to produce bio-fertilizer that can then be used to directly fertilize plants.
Advantages of using PKS for bio-fertilizer production:
The main use of PKS as discussed in this article is as fertilizer. Studies has shown that using bio-fertilizer produced from PKS has a positive effect on the growth of plants. Soil with high acidity benefits from the application of this bio-fertilizer by being able to provide more nutrients to the plants. Other than that, this bio-fertilizer also has the ability to promote water retention in the soil which aids in the growth and health of the plants.
Another advantage of the usage of PKS is the reduction of waste from palm oil mills. Since unrecycled PKS will only be burned and disposed, recycling the waste into a reusable source could benefit the mill by selling the PKS to companies that produce bio-fertilizer from this material. This, in return, could also reduce the pollution to the environment due to the burning and disposal of the waste.
The PKS charcoal that can be produced from PKS is a precursor for activated carbon. Currently, activated carbon is mostly prepared from coconut shells. This source of raw material is more costly than using PKS for the same product. Therefore, if PKS is recycled to produce activated carbon, the cost of processing could be reduced while increasing the outcome.
The palm oil industry is one of the largest industries in Malaysia. This rich with resources country processes palm oil both for local usage and for exports. Being one of the largest palm oil producers, there is also a lot of waste generated by palm oil-producing factories. If mismanaged, the waste could lead to pollution. The good news is that most of the waste from a palm oil factory can be recycled to produce a different product. Several common wastes and their recycled products are discussed here. Palm Kernel Shells (PKS) The kernel shells are the left behind fractions of the palm seed once the nut is removed by the crushing mill. The shells consist of a mixture of large and small particles and dust-like particles. These kernels have a low moisture content. Therefore, it is easier to process the kernels as they require less biological activity, energy, and power consumption during processing (due to their low moisture content). A process known as microwave vacuum pyrolysis converts the PKS into fertilizer. Via this process, the fertilizer is formed as biochar. Biochar is an organic bio-fertilizer that causes less harm to plants than chemical fertilizers. In a study, biochar was used to fertilize oyster mushrooms. The result came out impressive with bigger, heavier as well as faster grown mushrooms.
Empty Fruit Bunches (EFBs) As the name describes, empty fruit bunches are simply the bunches of fruits that are left behind once the oil palm seeds are removed. Some factories burn these bunches, causing air pollution. Therefore, instead of merely burning the EFBs, steps can be taken to convert the waste into compost fertilizer. The EFBs could be composted into fertilizer that can be used for various plants, fruits, and crops. Larger companies process the EFBs in high pressured machines to quicken the composting process before applying the fertilizer to crops. Small scale farmers however, directly place the EFBs around their oil palm trees where the bunches act as a water storage source, reduce weeds and also fertilize the trees as they slowly decompose.
Palm Oil Mill Effluent (POME) One of the highly polluting waste of palm oil mills is Palm Oil Mil Effluent (POME). POME is a form of liquid that is normally discarded into nearby ponds, leading to groundwater and soil pollution as well as releasing methane gas into the environment. This liquid effluent can be recycled into fertilizer. For the fertilizer production, the raw effluent is first treated anaerobically before adding to chicken manure. This mixture forms an excellent NPK fertilizer which has been proven to increase the leaves size of kangkung while producing fresher produce. Other than kangkung, it could also be used as a fertilizer for other types of vegetables and fruits.
Photo Credit: theedgemarkets.com
KUALA LUMPUR (Jan 5): Total Malaysian palm oil production is expected to increase slightly by 200,000 tonnes to 19.6 million tonnes in 2021, versus 19.4 million tonnes a year ago, according to the Malaysian Palm Oil Council (MPOC).
However, this also means that the projected Malaysian palm oil production still fell short of 19.8 million tonnes in 2019.
Going into 2021, MPOC chief executive officer Datuk Dr. Kalyana Sundram, in a virtual conference at the Palm Oil Trade Fair and Seminar 2021 today, said the palm oil global supply is expected to be affected by the La Nina weather pattern.
Meanwhile, Malaysia’s crude palm oil (CPO) export is estimated to be at 4.5 million tonnes, of which India, the Netherlands, Kenya, Italy, and Spain are among the major markets.
“Malaysian CPO export to India in 2021 is likely to stay strong as the current levy on Indonesian CPO export will give a price advantage to Malaysia,” said Kalyana, noting that this is despite the re-imposition of Malaysian CPO export duty from January 2021.
Note that imports to India rose significantly from June onward after the zero CPO export tax from Malaysia, which in turn helped support CPO prices in the second half of last year.
However, palm oil export from China — which also saw strong demand last year — will be challenged due to lower and prices of other oils versus palm oil, said Kalyana.
Credit: theedgemarkets.com | Wong Ee Lin; Surin Murugiah
KUALA LUMPUR (Nov 26): Malaysia’s palm oil export value to the global market would be affected if Malaysia no longer exports the commodity and other palm-based products to the European Union (EU) as the region is the country’s second-largest palm oil market after China, said the Ministry of Plantation Industries and Commodities (KPPK).
Minister Datuk Dr. Mohd Khairuddin Aman Razali said the country’s export of palm oil to the EU amounted to 2.8 million tonnes.
“Out of this total, the export value of palm oil and palm-based products to the EU in the first nine months of this year amounted to RM8.5 billion compared with RM8 billion in the same period in 2019,” he said during his winding up debate on the Supply Bill 2021 in the Dewan Rakyat today.
However, Mohd Khairuddin said the government was always striving to increase the export value of palm oil and palm-based products by exploring new markets which are net importers of oils and fats.
“The market demand for palm oil was encouraging over the past few years.
“The new markets are Central Asia — Uzbekistan, Kazakhstan, Turkmenistan, and Kyrgystan; Europe — Bosnia and Herzegovina, Croatia, Romania, and Montenegro; Africa — Mauritania, Congo, Madagascar, and Kenya; the Middle East and West Asia — Algeria, Morocco, Yemen, and Libya; and America — Haiti, Jamaica, and the Caribbean,” he said.
In a related development, Mohd Khairuddin said the Ministry of Finance (MoF) through Budget 2021 had announced an allocation of RM20 million to address the anti-palm oil campaign.
“KPPK believes the lower allocation is in line with cost savings from the overseas mission and physical engagement sessions which could not be undertaken due to the Covid-19 global pandemic.
“Towards that end, the ministry will continue to carry out promotional efforts to increase the marketability of palm products virtually and through government-to-government cooperation.
“I am confident that with the allocation, we will be able to implement an advocacy strategy that is capable of addressing the concerns expressed,” he said.
Article credit: https://www.theedgemarkets.com/author/Bernama