Russia's invasion of Ukraine has pushed up fuel prices and disrupted supply chains. Now it is raising the cost of fertilizers, due to sanctions and interruptions in production and shipment. Coffee producers have had to cope with a doubling of the cost of this critical input over the past year, according to World Bank data.
Bloomberg Linea, the news service's online Latin American platform, has reported that Nicaraguan coffee farmers have been reducing their purchases of fertilizer to make ends meet, while Guatemalan growers are diluting nutrients to stretch their supplies further. Costa Rican farmers hope that nutrients still left in the soil will suffice into the next planting season.
The price spike reflects the critical roles that Russia and its neighbors play in supplying the world with fertilizer. Russia, together with Belarus, have approximately 40% to 45% of all deposits of phosphate and nitrogen, while Russia is the world’s second-leading exporter of potash. These are the three raw materials needed to make compound fertilizers. Ukraine is also a big exporter of these products.
And now there are concerns that the other major supplier, China, might restrict its exports of fertilizer due to Covid-related bottlenecks and concerns about maintaining sufficient domestic supplies.
Colombian coffee trade unionist, Faber Buitrago, speaking on LAFM radio station, said "a year ago we had fertilizer prices between 80,000 and 85,000 Colombian pesos ($20 and $22) per sack, and now we are seeing them at 214,000 ($50), which will cause significant coffee price increases."
A 2019 study by Caravela Coffee found that fertilizers and other inputs account for 16–33% of production costs for across seven coffee farming nations in Latin America.
President of the National Coffee Federation of Colombia, Roberto Vélez, said his group is talking with Gustavo Petro’s new government about getting more direct subsidies for coffee growers as well as investment to increase local production of fertilizers to reduce dependence on imports.
But there is good news for farmers for the 2022–23 crop year. According to a study by the University of Illinois, fertilizer supplies for the western hemisphere appear to be adequate.