Russia’s invasion of Ukraine is putting food security at risk in Zimbabwe, 11 000km to the south, another demonstration of how disruptive the conflict is to the world economy.
Russia, which is being subjected to sanctions by countries from the U.S. to Japan, is trying to halt exports of fertilizer by its producers and the war has largely closed trade out of the Black Sea region, used by other producers.
Zimbabwe imports about a quarter of a million tonnes of nitrate fertiliser from Russia annually. While there is enough in stock to allow the growing of wheat this winter, there is likely to be little left for maize, the country’s staple food, when summer planting starts. If sourced from elsewhere, fertilizer prices are likely to surge.
“Zimbabwe’s exposure to the Russia and Ukraine conflict is that of nitrate,” said Graeme Barr, managing director of Nutrimaster, the Innscor unit that imports fertiliser into Zimbabwe. “There is no plan B. Prices for nitrate are going to soar.”
While farmers of tobacco, also grown in summer but with higher profit margins, may be able to absorb price increases, maize farmers won’t, he said.
Even for wheat farmers costs are already surging with fertilizer prices having risen by 50%, Graeme Murdoch, deputy chairman of the National Wheat Contract Farming Committee, said in an interview.
Russia produces 17% of the world’s natural gas. Both gas and ammonia are key in the manufacturing of fertilizer. The conflict has seen gas prices rising to their highest point in years and raised concern over ammonia supplies.
Fertilizer imports account for 6.1% of Zimbabwe’s imports. The cost of importing ammonia has already more than doubled over the past year alone, according to Sable Chemicals, the country’s sole manufacturer of ammonium nitrate fertilizer.
Sable had already seen gas prices rising to US$1,400 per tonne in January, from US$625 in January last year.
Among other Russian investors in Zimbabwe is Uralchem, the fertiliser giant that has recently set up in Zimbabwe and was one of the bidders for phosphate producer Chemplex.
Wheat supply disruption
The conflict has already accelerated fuel price increases, with the energy regulator increasing prices twice in the last week and government priming the market for a further hike next week.
Wheat supplies have also been disrupted, according to the Grain Millers Association of Zimbabwe.
The country grew the biggest wheat crop in years in 2021 as it expanded irrigation, saving US$146 million in imports, but still needs imported wheat to blend with local grain to make bread.
“However, the country will need to import 155 000 metric tonnes of wheat to mitigate on the variance between local production and national demand,” Musarara said.
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Bloomberg/newZWire
