‘I’m afraid we’re going to have a food crisis’: The energy crunch has made fertilizer too expensive to produce, says Yara CEO
“I want to say this loud and clear right now, that we risk a very low crop in the next harvest,” said Svein Tore Holsether, the CEO and president of the Oslo-based company. “I’m afraid we’re going to have a food crisis.”
Speaking to Fortune on the sidelines of the COP26 climate conference in Glasgow, Holsether said that the sharp rise in energy prices this summer and autumn had already resulted in fertilizer prices roughly tripling.
“To produce a ton of ammonia last summer was $110,” said Holsether. “And now it’s $1,000. So it’s just incredible.”
Food prices have also risen, meaning some farmers can afford more expensive fertilizer. But Holsether argues many smallholder farmers can’t afford the higher costs, which will reduce what they can produce and diminish crop sizes. That in turn will hurt food security in vulnerable regions at a time when access to food is already under threat from the COVID-19 pandemic and climate change, including widespread drought.
The company, whose largest shareholder is the Norwegian government, has donated $25 million worth of fertilizer to vulnerable farmers, Holsether said. But Yara isn’t able to eat the costs of such a dramatic rise in energy prices, he says…
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