The president of the Russian Fertilizers Producers Association (RFPA) Andrey Guryev took part in a panel discussion at the Saint Petersburg International Economic Forum 2022 on “Food safety: global challenges and opportunities”, which was held with the support of RFPA.
The panel included the Deputy Prime Minister of Russia Viktoria Abramchenko, Minister of Economic Development Maksim Reshetnikov, Minister of Chemicals and Fertilizers of India Mansukh Mandaviya, the National Coordinator of Russia for Implementing the UN Food Systems Summit and Rector of the Diplomatic Academy of the Ministry of Foreign Affairs of Russia Alexander Yakovenko, Director of the UN Food and Agriculture Organization (FAO) for Liaison with Russia Oleg Kobyakov, the Brazilian Ambassador to Russia Rodrigo de Lima Baena Soares, the Senegalese Ambassador to Russia Jean-Baptiste Thiatti Tin, and Senior Vice-President of VTB Bank Vitaly Sergeychuk.
Opening the discussion, moderator and aide to the Russian President Andrei Fursenko pointed out the serious challenges to global food security that Covid-19, disruption to supply chains, as well as sanctions pressure have posed.
“Established supply chains have collapsed. According to UN estimates, last year 800 million people – that’s one tenth of the world’s population – were undernourished. This year new, major challenges have emerged in connection with economic sanctions. As a result, the food price index has reached a record high. The UN says there will be famine in 2023. It’s not enough just to sound the alarm: we need to propose concrete solutions,” said Andrei Fursenko.
Russia is a food donor and exports agribusiness produce to the world’s critical nations in terms of population, Deputy Prime Minister of Russia Viktoria Abramchenko stressed in her speech. But at the same time the logistics of supply are currently being undermined by sanctions, and so a global arbiter is needed to address issues of food security, she argued.
“The world needs a global food arbiter. In 1945 the FAO was set up at the UN to fight global hunger. I call on my colleagues at the UN and FAO to set up an international Food Red Cross, which would address the problems caused by illegal sanctions that have paralysed logistics, and by introducing restrictions on settlements between countries, which would ultimately ensure that all countries have equal access to the food market,” said Viktoria Abramchenko.
The Deputy Prime Minister added that trade restrictions had already led to a global shortage of fertilisers and a subsequent drop in yields.
The Director of the FAO Liaison with Russia Oleg Kobyakov echoed Viktoria Abramchenko’s calls for the global food crisis to be addressed through international mechanisms.
“The FAO is an organisation based on cooperation, the same line of reasoning that recognises Russia’s role in ensuring food security. We monitor, we issue numerous publications with the latest statistical data, we adopt recommendations. Among the recommendations on how to overcome the current food crisis is one to reconsider and analyse the sanctions policy, and to abandon them and other restrictive measures,” said Oleg Kobyakov.
Among the factors contributing to the worsening situation on the global food market, alongside sanctions, National Coordinator of Russia for Implementing the UN Food Systems Summit and Rector of the Diplomatic Academy of the Ministry of Foreign Affairs of Russia Alexander Yakovenko also highlighted the rise in gas prices as a result of Europe walking away from long-term contracts. It has led to a rise in the price of fertilizer and the closure of businesses which had previously produced them in the EU.
“What’s very important, and the Ministry of Foreign Affairs has repeatedly said this, is that Russia will fulfil all its obligations regarding grain and fertilizers. All countries should be certain that we are producing just as much fertilizer and food for export, and that we guarantee their supply to foreign markets,” said Alexander Yakovenko.
RFPA President and Member of the Bureau of the Board of the Russian Union of Industrialists and Entrepreneurs Andrey Guryev noted the key role that fertilizers from Russia and Belarus play in global agribusiness. “Russia and Belarus supply fertilizers to more than 130 countries across all inhabited continents. In other words, our presence is global and extremely large. Around 65% of fertilizers are supplied to developing countries.”
Therefore, restricting the export of fertilizers from Russia, which sanctions lead to, could drive hundreds of millions of people towards hunger, the RFPA president said.
“The world is actually entering a period of acute shortages in the mineral fertilizer market. 40 million tonnes in physical mass – that’s the amount we export on the world market every year. Based on the estimate that the average person consumes 150 kilograms of wheat every year, this means that over half a billion people could be left without white bread overnight,” said Andrey Guryev.
Guryev also drew attention to the threat of artificial hindrances to investment in the fertilizer industry as a result of sanctions imposed on technology and equipment supplies to Russia. This will limit the growth of production volumes which, in turn, will prevent Russia from continuing to ensure global food security.
“This is why it is essential that the UN deem mineral fertilizers humanitarian goods as soon as possible. Because the industry is and will remain strategically important for the foreseeable future,” Andrey Guryev concluded.
No less important for the stability of the global food market is a stable supply from Russian grain producers, noted Senior Vice-President of VTB Bank Vitaly Sergeychuk.
“Russia as a supplier plays a critical role for many countries. Turkey, for example, imported 9.3 million tonnes of grain last year, approximately 70% of which was purchased from Russia. A similar situation can be found in Iran, where approximately 80% of imported wheat is purchased from Russia,” Vitaly Sergeychuk stated, adding that experts expect a record grain yield in Russia this year – approximately 130 million tonnes, 86-87 million of which will be wheat.
“We expect exports from Russia to also reach a record level – around 48-50 million tonnes of grain and 39 million tonnes of wheat. These supplies are especially important in light of continuing price increases on the global market, a consequence of the sanctions and challenges our industry is facing. Difficulties with payments, rising freight costs, a lack of insurance – these all lead to price increases. The price of wheat therefore has risen by approximately 50% over the last 3-4 months,” the Senior Vice-President of VTB Bank highlighted.
India, one of the largest consumers of fertilizers, links food security closely with the availability of fertilizers, said the Minister of Chemicals and Fertilizers Mansukh Mandaviya.
“Fertilizers should be available on the global market at an affordable price. The need to provide the planet’s growing population with food, climate change – these are issues that require our long-term intervention to help address the situation. We must minimise their negative effects, using technology to increase production. India and Russia must create a common environment to focus on these priorities and further strengthen our friendly relations”, said Mansukh Mandaviya.
Brazilian Ambassador to Russia Rogrigo de Lima Baena Soares noted the key role fertilizers from Russia play in Brazilian agriculture. He pointed to the need to overcome problems with supply and payment caused by sanctions, and underlined Brazil’s unequivocal position on this issue.
“We do not apply nor support sanctions. Over the last few months international trade flows have experienced severe shocks. The current climate has been marked by uncertainty, mostly due to disruptions to previously established logistical and financial chains. These difficulties have been gradually overcome thanks to the efforts of Brazil and Russia. We will continue to work towards this end to further strengthen our relations,” stated the diplomat.
In turn, Senegalese Ambassador to Russia Jean-Baptiste Thiatti Tan warned of the threat of “unprecedented” hunger looming over a large part of the population of the continent of Africa.
“Today we are seeing disruptions in the supply chains of fertilizers and grains. At the same time, we are seeing a significant increase in hydrocarbon prices, which causes budget imbalances and leads to dramatic consequences for the population,” said the diplomat.
Concluding the panel discussion, Minister of Economic Development Maksim Reshetnikov outlined the Russian government’s goals in light of the situation on the global food and fertilizer market: to prevent a rise in prices within the country while remaining a reliable exporter.
“We are balancing the needs of the internal market with the demand of our key partners – primarily the BRICS countries – for fertilizers. We are doing all this within the framework of WTO agreements and norms,” said the minister.
He noted that growing investment by domestic mineral fertilizer producers has enabled Russia to increase exports year-on-year.
“It’s extremely important for us that there are no barriers importing the technology and equipment needed for fertilizer production. Without this it will be extremely difficult to increase production. We call on everyone to pay close attention to this problem,” Maksim Reshetnikov concluded.
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