The alarming situation with the supply of food and fertilizers as a result of U.S. and EU sanctions has broken the global market for these goods.
Most countries of the world have already realized this and began to put pressure on Washington and Brussels, 26 countries even closed their food export markets waiting for the crisis to worsen. Despite statements from Washington, indirect sanctions against Russian companies are still in effect. And many countries are running out of time to put fertilizer in the soil. This means that harvests will be low.
The main problematic areas when selling Russian fertilizers to foreign jurisdictions can be divided into three components: the first one is logistics. There are limited opportunities to charter the commercial fleet of foreign countries, because most companies are afraid of falling under Western sanctions. This is followed by the limited opportunities to use the Russian fleet to deliver Russian cargo to foreign ports.
The second is insurance. The possibility to obtain insurance coverage for sea voyages from Russia and with Russian goods on board, is also very limited.
Third is banking services. There is almost no possibility to make payments for logistics and insurance, as well as to receive payment for goods.
There is one last issue. Constantly changing Western sanctions regimes require companies to have or obtain new legal opinion, which must reflect up-to-date information. All of this is expensive and time-consuming for businesses.
Thus, indirect sanctions increase the cost of food and fertilizers, which is naturally passed on to the consumer. In Western countries, and in the world as a whole, inflation and shortages of products are on the rise. The Non-Western countries risk facing shortages of food and fertilizers as early as this year. The Food and Agriculture Organization of the United Nations (FAO) has set the first figure: 15 million hungry people.
The Non-West could also raise its voice in this alarming situation, calling on Western nations to stop ramping up global inflation and shortages of vital resources for all countries.
The global food crisis will not be solved unless agricultural products from Russia are returned to world markets, UN Secretary-General António Guterres has rightly said. It is hard to disagree with this.
Alexander Yakovenko, Russia's National Coordinator for the implementation of decisions of the UN Food Systems Summit, Rector of the Diplomatic Academy of the Ministry of Foreign Affairs of the Russian Federation.