World Grain - December 2024 - 34

FEATURE: WITH GLOBALIZATION DYING, WHAT COMES NEXT?
G7 vs. BRICS Phosphorus/Potash Production
World nitrogen
production 2021
China
27
39
Rest of
World
4
2
Indonesia
8
9
United States Ukraine
11
Russia
6
India
18
Morocco
Russia
BRICS nations dominate world production of nitrogen, phosphorus and potash.
like Brazil while squeezing traditional suppliers like
the United States.
" In a broad sense, I think the United States is going
to be seeing a diminishment of its export profile while
other countries step up and take demand accordingly. "
This geopolitical restructuring is forcing many agricultural
players in the United States and the European
Union to consider the nature of future demand, and
how they can stay competitive in an increasingly divided
world. Moreover, they might face a major input
disadvantage in this emerging two-headed global trading
system: fertilizer production and supply.
Basse noted that BRICS nations dominate world production
of nitrogen, phosphorus and potash (see above
graphic).
" When we think about the Achilles heel of many of
the G7 nations, it's that they do not have the availability
of fertilizers, in particular phosphorus, to keep crops
and to keep cultivation moving, " he said. " So, this is
something to keep in the back of your mind you want to
keep very forefront in terms of what's to come. "
Tariffs increasing
The new Trump administration brings fresh concerns for
US exporters. According to Basse and his Washington
sources, Trump's first 100 days likely will include imposing
tariffs of 5% to 10% on all imported goods, and
potentially up to 60% on Chinese imports. Retaliatory
tariffs that impact US exporters are inevitable.
The impact on agriculture will be severe. China is a
massive buyer of US farm goods, accounting for 19%
of total US agricultural exports worth $34 billion in
2023. But Basse expects this to drop sharply as Trump
wages " war against China. " He forecasts agricultural
exports will subside to just $16 billion in 2025, down
from a high of $43.5 billion in 2021.
" China is a buyer in the world grain markets that you
just cannot replace, " he added. " As China pulls back,
the United States is losing its biggest customer, which
is a major factor in the 37% decline in US farm incomes
over the past two years. "
Farming headwinds
All this comes following a tough year for farmers
worldwide, with global grain prices falling while production
costs rise. Basse said US farmers alone are experiencing
" the biggest drop in net farm income over
two years on record, somewhere around $70 billion. "
This downturn ended a relatively profitable period
during the pandemic and led to a crisis of confidence.
" Farmers are dissatisfied with profits and margins, "
Basse told World Grain, adding that high input costs
spanning equipment, fuel, fertilizer and chemicals
34
December 2024 / World Grain / World-Grain.com
%
Jordan
United
States
4
1
10
31
Canada
17
Belarus
%
Rest of
World
World phosphorus
production 2021
World potash
production 2021
Russia
22
China
39
Rest of
World
5
Kazakhstan
20
14
Germany
%
13
China
Source: AgResource Company, © Bits and Splits-stock.adobe.com
http://www.World-Grain.com
World Grain - December 2024

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