Michael Wurz

for the next agricultural production season.

And especially if we are looking at compounded effects and the high likelihood that we will have a lot of droughts this year because of the El Niño phenomenon that is rated about at a 60 to 70 percent probability that there will be

increased climate impact on agricultural production later this year, these issues are compounding effects that are basically adding upon each other and result in critical shortages, not only for fertilizer, but down the road during the second half of the year also potentially with regard to food shortages in the parts of the world that are highly dependent on fertilizer use.

This is mostly a problem for Southeast Asia and East Asia and a lot of sub-Saharan African countries.

Europe and the United States, not only because there are more financial resources, are a little more shielded.

But it's important to recognize that the ripple effect of higher food prices will also make it much more important to provide humanitarian aid.

And they will exacerbate a situation that is difficult to begin with because we have over 730 million people worldwide.

that are suffering hunger or food shortages.

And we have a number of especially African countries where we have situations that the World Food Program classifies as situations where people live in famine or close to famine.

So the ripple effects of the issues that we're talking about now, they will be even more severe in these situations where people are under a lot of strain already.

So it's important to keep in mind that this is not only an issue for the production side or for higher gas prices at the gas pump when we're filling up our cars, but that this is a global phenomenon because of the interconnected markets.

Well, I think the discussion is starting.

It was interesting to see that for about a week after the war started, that the discussion was mostly focusing on energy prices and gas prices in Europe and here in the United States.

But now the discussion is constantly evolving and recognizing that we are living in an interconnected world where

These factors of highly integrated supply chains and production situations where the linear threat of climate change and disruptions of supply chains that have outsized effect in regions that might be hundreds or maybe even thousand miles away from the conflict that we're talking about are a reason for concern.

The problem is that the issues that we are talking about right now, they are limited to no really short-term fixes because I think countries will start to think about the diversification of import sources when it comes to food and fertilizer.

We need more regional coordination, specifically in Africa.

And there will be obviously more countries looking into the expansion of domestic agriculture to become more independent from these long distance supply routes.

And obviously, in the medium term, sustainable fertilizer production that uses less energy and renewable energy investments.

will insulate the system in a much more consistent manner.