Fertilizer

Fertilizer is a critical input for agricultural productivity, and its increased use has been closely associated with rising agricultural yields in many countries. In developing economies that rely heavily on fertilizer imports and are home to vulnerable smallholder farmers, fertilizer price spikes can pose serious risks. When farmers lack access to effective risk-sharing mechanisms, sudden or excessive increases in fertilizer prices can discourage adoption, disrupt planting decisions, and reduce productivity.

The FAO Food Price Index rose 1 percent in April, driven by increasing cereal, dairy, and meat price. While the Index was 7.6 percent higher than its April 2024 level, it remains nearly 20 percent lower than the record reached in March 2022.

The FAO Food Price Index remained stable in March, with falling cereal and sugar prices balancing rising meat and vegetable oil prices. The Index was almost 7 percent higher than its March 2024 level but still remains significantly below March 2022 levels.

Fertilizer prices experienced a significant surge in 2021, driven by the post-COVID 19 global economic recovery. Russia’s February 2022 invasion of Ukraine propelled prices even higher. Broad economic sanctions on key fertilizer exporters Russia and Belarus exempted agricultural products but triggered further economic disruptions. Overall, the conflict heightened market uncertainties regarding the availability of potash, phosphate, and nitrogen-based fertilizers in international trade.

Rising vegetable oil, cereal, sugar, and dairy prices drove the FAO Food Price Index up by 1.6 percent in February. However, overall prices remain almost 21 percent lower than the peak seen in March 2022.