Trade

Over the past decade, the world’s food systems have faced multiple significant shocks, from the COVID-19 pandemic and the impacts of the Russia-Ukraine conflict to numerous climate change-driven natural disasters and instances of civil unrest and political instability. These challenges have disrupted markets, driven up food and fertilizer prices and price volatility, reduced food availability and accessibility, and pushed millions of people into hunger.

The FAO Food Price Index continued to decline in March, dropping by 2.1 percent from the previous month. The Index has fallen by almost 21 percent since March 2022.

The real global price of food surged in 2022, reaching well above the previous peak seen in the 2011 food price crisis. While prices declined somewhat in July 2022, they remain alarmingly high, and some countries have enacted policies, such as export bans, to try to rein in prices on their domestic markets.

The Russia-Ukraine war has caused significant price volatility in agricultural markets over the past year—for wheat, in particular, price levels and price volatility reached the highest levels since the 2007/08 marketing year. Both have fallen back to pre-war levels over the past six months, but volatility remains high relative to historical levels (Figure 1), indicating that significant market uncertainty remains, creating ongoing vulnerability for global food security.

Russia’s 2022 invasion of Ukraine triggered global disruptions in markets for key food crops and fertilizers, threatening food security worldwide. With the war now entering its second year, high international food prices have moderated, though domestic price levels remain high in many low- and mid-income countries. Here, we turn to global fertilizer markets, examining how they weathered the past year and the likely impacts going forward for agricultural production and food security.