There's no question in our minds a global food crisis is emerging. The last example is Russia's freeze on fertilizer exports will complicate agricultural production in Brazil.
Fertilizer costs before Russia invaded Ukraine were already high. The invasion made everything worse as Moscow's protectionism has crimped exports of the nutrients critical for growing all sorts of farm goods.
No other nation in the world relies on foreign fertilizer than Brazil. According to Bloomberg, the South American country imports more than 85% of its fertilizer demand. Russia is its top supplier, and Belarus provides 28% of the total.
"Restraining fertilizer consumption may hurt crop yields, boost inflation and threaten food security," Brazilian Agriculture Minister Tereza Cristina said this week.
For some context, Brazil has transformed into an agricultural powerhouse over the last two decades. It has become a leading exporter of coffee, sugar, soybeans, manioc, rice, maize, cotton, edible beans, and wheat. The bigger problem is how the fertilizer disruption and soaring prices may result in future harvest declines.
Dwindling food supplies in Brazil may only act as an inflationary pressure for global food prices, possibly rocketing prices to new heights.
Sanctioned Russian fertilizer billionaire, Andrey Melnichenko, warned the Ukraine conflict would result in a world food crisis.
"The events in Ukraine are truly tragic. We urgently need peace. As Russian by nationality, Belarusian by birth, and Ukrainian by blood, I feel great pain and disbelief witnessing the brotherly peoples are fighting and dying," Melnichenko told Bussiness Insider.
"One of the victims of this crisis will be agriculture and food," Melnichenko said, adding that the conflict has "already led to soaring prices in fertilizers which are no longer affordable to farmers."
Melnichenko said global food supply chains were already under pressure from COVID impacts, and "now this will lead to even higher food inflation in Europe and likely food shortages in the world's poorest countries."
The fallout from the conflict is rippling worldwide as Brazil could be the latest causality that will only worsen the global food crisis.
Food inflation is not transitory. Before you know, we'll all be eating cricket burgers at McDonald's.