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International fertiliser value will increase will a trigger ripple e…

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Meals shortages are one other doable consequence. DM168 spoke to Seelan Gobalsamy, CEO of Omnia, which provides fertiliser to the agriculture business, to raised perceive the dangers and alternatives for fertiliser suppliers and meals producers in southern Africa.

What position does Omnia play in SA’s agriculture and fertiliser market and the way large a job participant is the corporate in its respective markets?

Omnia Nutriology is a market chief in agriculture in southern Africa and provides inputs (fertiliser and speciality merchandise), analytical, advisory and know-how options.

The division produces granular, liquid and speciality fertilisers and provides anhydrous ammonia for direct utility to the soil. These merchandise are provided to a broad buyer base of farmers and different last customers all through southern Africa.

 How a lot fertiliser does South Africa import relative to the quantity the nation produces?

South Africa imports about 80% of fertiliser consumed, a few of which is utilised throughout varied SADC [Southern African Development Community] markets.

 If South Africa is a internet importer of fertiliser, to what extent is the nation affected by present world provide and demand imbalances?

Fertiliser is a key enter to the agriculture sector, which contributes considerably to world GDP.

Agriculture secures meals safety, gives employment and helps livelihoods. Regionally, fertiliser can contribute as much as 35% of a farmer’s enter prices, relying on varied circumstances just like the crop that’s produced and cultivation practices.

The surge in world fertiliser costs has elevated concern over meals safety throughout sub-Saharan Africa, as all farmers are depending on imports.

Russia is the second-largest exporter of fertiliser after the US. To what extent is the Russian invasion of Ukraine affecting provide? And what has occurred to costs and transport prices consequently?

The Russia-Ukraine disaster has contributed to the rise within the value of fertiliser globally resulting from provide and demand dynamics. International fertiliser provide and demand is finely balanced, and Russia and Ukraine are massive producers of fertilisers, thus costs have elevated additional up to now few months.

The intensive sanctions imposed on Russia might negatively have an effect on Russia’s buying and selling actions and not directly push fertiliser costs larger than the surge skilled up to now couple of months.

Since January 2021, all our enter supplies prices have elevated: ammonia has gone up by 220%, urea by 148%, diammonium phosphate by 90% and potassium chloride by 198%, compounded by a rise in transport and different logistics prices.

 Each China and Russia have now put a halt to sure exports, comparable to ammonia. How will that have an effect on Omnia?

Thankfully, our world provide chain community has allowed us the flexibleness to not depend on Russia or Ukraine, inserting us in a robust place to mitigate the challenges brought on by present provide shortages.

Out of this darkish warfare and the resultant disruption, is there any alternative for Omnia and different fertiliser producers to extend their manufacturing and scale their markets?

It is vital that all of us work collectively to guard our agriculture sector to make sure we have now an ample provide of inputs. Omnia has an in depth provide chain community and substantial native manufacturing capabilities that we constantly optimise to fulfill the calls for of our clients.

Our sourcing technique is diversified, relying on the uncooked materials and accessible options, which ensures price competitiveness and reduces seasonal danger.

Moreover, we interact with clients repeatedly to know their demand necessities to obtain timeously and guarantee constant provide.

We’re additionally in a position to optimise the important thing provide of ammonia, which is used for fertiliser and explosives. Now we have invested in our personal infrastructure and bolstered our native and world provide chain and logistics.

There was a lot discuss concerning the affect of the warfare on one of many world’s nice breadbaskets. Which commodities are affected, and to what extent is South Africa, and the broader SADC area, affected?

Collectively, Russia and Ukraine are important producers of wheat, maize and sunflower oil.

Instantly, the potential affect is the uncertainty of provide and improve in commodity costs globally. Because the continent is a internet importer of meals, there will probably be a subsequent affect on client inflation, together with meals costs.

This will likely result in heightened meals insecurity throughout the continent, and the private and non-private sectors must collaborate to keep away from this potential disaster.

Whereas South Africa will really feel the affect of the Russia-Ukraine battle on meals costs, it’s also prone to profit from maize exports. As a internet exporter of maize, South Africa imports about 40% of its wheat. And consequently, the short-term affect of the battle is thru value transmission and never the restrictions on the commodities’ availability, subsequently shortages are unlikely.

As soon as once more, is there a possibility for African agricultural producers to scale as much as meet provide, and in that case, which nations and merchandise stand to profit?

South Africa is effectively positioned to make the most of the potential adjustments as there may be manufacturing capability of fertiliser inside the nation. We all know that nations with environment friendly ports are much less affected by provide chain disruptions. Different benefactors will probably be nations with progressive agriculture insurance policies that constantly undertake trendy farming applied sciences, comparable to Zambia.

Zambia constantly produces surplus agricultural merchandise that [the country] can export to neighbouring nations when demand will increase.

That is the place the Omnia Nutriology strategy assists farmers to extend yields, [while] conserving scarce assets like vitamins and water. DM168

This story first appeared in our weekly Every day Maverick 168 newspaper which is obtainable for R25 at Decide n Pay, Unique Books and airport bookstores. On your nearest stockist, please click on here.


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