Global fertiliser shortage threatens 2026 crop yields

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A warning the war in Iran could cost the world up to 10 billion meals a week.

It's world business express from the BBC World Service. I'm Sarah Rogers.

Also today China lifts its tariffs on Africa countries apart from one.

And the UK whiskey industry has its spirits lifted after restrictions on exports to the US are dropped.

Now I know the war in Iran has already caused huge disruption in world energy markets.

Now there's a worry it could cost the world up to 10 billion meals a week.

Spain, Tore, whole setter, the boss of Yara, which is one of the world's biggest fertilizer companies told the BBC

that some crops will not be grown this year.

Fertilizer is not just any other commodity.

It's responsible for half of the food production in the world.

And given the importance of the straight of forms for Fertilizer exports,

it has huge consequences for everyday that that passes.

And right now it's not only a matter of not getting product out.

It's also a matter of not being able to produce in that part of the world.

And it's very difficult to put exact numbers, no one has full worry of that.

But if I tried to estimate it could be that we were up to about half a million tons of nitrogen fertilizer

not being produced in the world right now because of this situation that we're in.

And if I tried to translate that into, okay, so what does that mean for food production?

I would get to up to 10 billion meals that will not be produced every week as a result of lack of fertilizers.

Now to a third of the global trade in fertilizer and the raw materials to produce it

does go through the straight of whole moves, which you know is effectively closed at the moment.

Mr. Holsetter said that while this is a global problem,

the worst effects could be felt in developing economies.

It will have the biggest impact where there's the least fertilizer application already.

And what I mean by that, the soil conditions in Europe are such that you can reduce somewhat in Europe

but not that big consequences on the crop yields.

Now, if we move to Africa, Africa is under fertilizing.

So you're not replacing the nutrients in the soil.

And when you then reduce just slightly on fertilizer application,

it will have a much bigger impact on the crop yields.

So we've had that warning there now, bring Randy Somal, fun manager at emerging investments in London.

And we've seen big movements in oil this week.

Haven't we from a four year high to now?

What's it around $107 a barrel?

So it's still very high.

It's worth saying there isn't it that $126 figure that we saw yesterday

was for the June Brent crude contract, which expired, which means the contract stops trading.

The July ones in force today can a change over period like that,

make things more volatile, can just explain it a bit to us.

Hi, and yes, it can, especially when we've seen steep rises in the oil price,

which has been the case throughout this year.

Boyle more closely trades on future as futures contracts and these expire monthly.

So as that month and period comes to a close,

the the person that has the open position has to decide whether to roll it over

or effectively to close it.

And if you're holding it for financial gain and you've seen a big rise,

you are more likely to close out.

So that's why we get that volatility at the end of the month.

And earlier this week, we had reporting huge profits in,

we from UK energy giant BP because of the war and around pushing up the prices.

But US companies X on and Chevron's just reported profits falling.

Is that a surprise?

That they were still very strong results from the US majors,

but certain issues that they had in Chevron's case,

they had an outage in Kazakhstan where they have large production.

So that impacted their profits.

And for X on again, it were very strong results, but it was just more of a timing impact

and that timing meant that they produced the dollar 16 per share an hour instead of just over two dollars.

That should clear out into the next quarter.

Okay, Randy, some fun manager at M&G investments. Thank you.

Now, as the war drives up those fuel prices, French carmaker Renault has told the BBC

it's driving up electric vehicle inquiries.

Recent data showed sales of EVs were at 51% in continental Europe in March,

compared to the month before.

But EVs have got a bigger carbon footprint than traditional cars to build.

Forançois Farah, director of innovation and sustainability,

told me that's where we need to look next.

We need to make sure that the materials are also low carbon.

So it means we need to have more recycled materials.

Even your boss has been calling for flexibility on those EU CO2 targets,

saying that no carmaker in Europe can meet them by 2030.

So do you need to get that right first?

The picture might have changed recently with the help of a war.

We are currently selling more than 50% pure battery EVs due to people realizing

that we were dependent on foreign oil.

So the reason why there was a request to relax this is first,

these are big businesses that are trying to protect their economical interest.

And second, we need a little bit more time to get there.

And then how do you deal with US pushback on the green agenda?

It's not helping for sure.

So basically it's like in some other areas of the world, they don't care so much about this.

So why should we care?

But what we have seen really is that it focuses all the people that had started

this journey to more sustainable materials.

They are now focusing on Europe because we are the only zone

that is continuing to do this.

And how do you make car production more sustainable

if you're getting batteries and chips from China, for example?

First, relocalizing everything we can, for example,

Renault 5 has 75% of their suppliers that are less than 300 kilometers from the plant.

Yeah, that could be 70% of the smaller parts, maybe some of the bigger,

more expensive parts are having to be imported in from elsewhere.

Yeah, it's not that dramatic.

It's not greenwashing or local washing.

However, what you say about the materials is true.

It has been tempting to go on the affordability route,

which is another problem that we are facing, cars are more expensive.

Therefore, people either buy less or the buyer is older and richer.

We need to make sure that we have this affordability

while making sure that we can still source some stuff from zones

where we have some control.

Francois Faron from Renault.

African countries exporting to China will no longer face any tariffs starting from today.

Beijing is extending a zero tariff treatment to 53 African nations.

One country is excluded, though, as we're teeny because it maintains ties with Taiwan.

Meanwhile, a trade deal between the European Union and South American countries

in the Mekosa block provisionally comes into force today,

despite appending court hearing on its legality.

Here's the BBC's Jonathan Joseph's.

This deal cuts import taxes and other trade barriers

whilst harmonising rules in areas such as food standards,

environmental protections and workers' rights.

The European Union and the four South American countries of Argentina,

Brazil, Paraguay and Uruguay have been keen to talk up its benefits

after decades of negotiations.

Both sides have been trying to increase trade elsewhere,

amid continued tensions with the United States and China.

Its legality is being challenged in the European Court of Justice,

mid-concerns in France and Poland in particular,

that increased competition will harm their farmers.

That was Jonathan Joseph and lastly in tariff news.

Whiskey Distillers in Scotland have welcomed President Trump's announcement.

He'll remove tariffs on Scotch whiskey imported to the US.

Mr. Trump said his decision was made in honour of King Charles following his state visit

and because it would also help American bourbon producers

who sell their used barrels to distillers in Scotland.

Graham Littledon is from the Scotch Whiskey Association.

This is a real boost to see tariffs go back to zero

in our largest global market.

And it's real thanks to the huge amount of negotiation

that's been going over many months at very senior level.

And perhaps the state visit has been the catalyst for just getting this over the line

and the King's added that little bit of royal sparkle.

The move applies to whiskey makers across the UK,

not just Scotland and drinks giant Diagio,

which shows Johnny Walker saw shares rise to 2% on the news.

Well, that's it from World Business Express with me Sarah Rogers.

Though do subscribe to get the latest just search for World Business Express.

Can one country steal another country's rain clouds?

This conspiracy theory has been repeated by politicians.

It's gone viral online and it's tapped into fears of water shortages in the Middle East.

So where does the idea come from and is it scientifically possible?

I'm Hannah Gelbart.

Join me on What in the World, a daily podcast from the BBC World Service.

We cover news and trending topics in less than 15 minutes.

You can find us wherever you get your BBC podcast.