Miller Magazine Issue: 147 March 2022

122 MARKET ANALYSIS MILLER / march 2022 25%-30% of maize and sunflower seed production, 10%- 15% of barley production and 20 to 25% of wheat pro- duction are in such oblasts. Spring barley will begin in March while maize planting typically begins in April. Win- ter wheat won’t typically be planted until September. LONGER-TERM EFFECTS—IMPACTS ON FERTILIZER AND ENERGY INPUTS The Russian invasion of Ukraine will likely provoke countermeasures by the EU, United States, and other countries which could have large impacts on Russian exports of natural gas and fertilizers. Russian exports of natural gas account for about 20% of global trade and Russia supplies about 40% of the EU’s current imports. Sanctions could halt trade and drive up natural gas prices to even higher levels. While European importers could switch to other suppliers such as the U.S., logistical issues—the U.S. exports liquified natural gas—add costs and would not provide significant relief, at least in the short term. Natural gas is also an important feedstock for the pro- duction of nitrogenous fertilizers such as ammonia and urea. The impact on fertilizer prices would be further ex- acerbated by the fact that Russia is an important supplier of nitrogenous fertilizers and potash. Russia account for 15% of global trade in nitrogenous fertilizers and 17% of global potash fertilizer exports. Belarus, an ally of Rus- sia and staging ground for the current invasion and al- ready being targeted by some international sanctions, accounts for an additional 16% of global market share of potash exports. Dependency for some countries, in- cluding Ukraine, on the supply from these two countries could be quite extreme (60% or more,). The global fertilizer market has been reeling from record high prices. Further shortages will have global implications, particularly in developing countries where price impacts could significantly reduce fertilizer use and result in poor local harvests at a time of reduced global stocks and record global prices. CONCLUSION: POSSIBLE NEXT STEPS Russia’s invasion of Ukraine poses serious risks to global food security that will require a range of respons- es from governments and international organizations.