Vladimir Putin was tricked by the West into believing that Russia was a reliable and safe gas supplier. This turned out not to be the case. Today, Svein Tore Holsether, CEO of Norwegian energy company Yara, warns the West that he is falling into Putin’s new trap.
There has been some calm in the global market due to the fall in the price of fertilizers, but it has fallen along with the fall in the price of gas, but gas is very important in the production of fertilizers.
Many experts have therefore said that global food shortages, due to lack of fertilizer, are not imminent. “It’s not even discussed anymore. There is enough supply in the markets,” market expert Ole Schou said in an interview with Finans about the situation in the fertilizer markets.
But Holsether disagrees. In a conversation with Børsen, he rightly said that prices are falling, but it’s too soon and too easy to make a global food crisis go away.
Although fertilizer prices are now similar to those before the Russian invasion of Ukraine , Holsether says the food crisis cannot be said to be over.
He pointed out that prices are still high in dollars and that is not good for those doing business in currencies that have fallen in value against the dollar.
Besides, high inflation is affecting the global market and there are also persistent issues of quality, bottlenecks and climate change.
He said 350 million people face acute hunger, twice as many as in 2019.
As for energy prices, he pointed out that they have come down because Europeans have been lucky with the weather this winter and it has given them some leeway. If the next winter is harsh, the gas supply will not be enough and the gas price will rise again.
The Russians have cut off gas in the West, but are pumping fertilizer into markets, including in Europe. Holsether said the West must be careful about the position it allows Russia to gain in the fertilizer market. “We have been cheated by cheap Russian energy. There is a big risk that we will become dependent on Russian fertilizer production. This is a serious situation,” he said.
“The first time we trusted Putin, it didn’t end well. If we make the same mistake again, with food and fertilizer, we can’t blame Putin anymore. Then we can only blame ourselves,” he said.
