'Fertilizer shortage may affect prices in summer'

Global fertilizer shortages may potentially cause volatility on agricultural commodity markets such as wheat, soy and sugar from the summer onwards, according to a report from ABN Amro published today. The food sector remains vulnerable due to its dependence on natural gas, the bank further states in the latest Stand van Food. And financing options are limited for further electrification. Due to long-term energy contracts, the effect of the high gas and electricity prices is currently still limited. The pain in the short term is mainly in higher costs for road transport, container prices and air freight, states ABN Amro. The bank expects the food sector later this year, when energy contracts expire, to also face higher energy prices, because the general expectation is that energy prices will remain high for a long time due to severe damage to production and transport facilities for fossil fuels. According to ABN Amro, the food industry has reduced its natural gas consumption, adjusted for lower production, by 8% and electricity consumption has increased by 12%. Despite electrification, natural gas still accounts for 70% of the energy used in the food industry. Dependence varies greatly by sector. According to CBS data, despite a reduction of 24% from 2021 through 2024, the flour industry is 89% dependent on natural gas, while slaughterhouses, after reducing gas consumption by 9%, now have a share of 42%. Because there is now, unlike during the 2022 energy crisis, less correlation between high gas and electricity prices, companies that have electrified benefit from the relatively lower electricity prices, according to the report. Limited financing options for electrification The overloaded electricity grid is of course a major obstacle to further electrification of companies, but ABN Amro sees another important barrier: limited financing options. Companies in the food industry only invest in new machinery once every ten to twenty years. Sustainable alternatives often have a longer payback period than conventional natural gas installations, among other things because the natural gas infrastructure is already in place, sustainable options are more expensive and technically less robust. To still choose the sustainable alternative, it is necessary for companies to have sales guarantees for the long term. This runs counter to the reality in the food industry, where sales contracts are often only concluded for one or two years. As a result, the food industry will for now still remain dependent on 'the whims of the natural gas market', according to the bank. Food prices increase ABN Amro also briefly addresses food prices in the report. In 2025, the FAO Food Real Price Index (the international prices of agricultural commodities, adjusted for inflation) remained unchanged. The index has risen slightly in the first months of this year. The bank expects that 'this upward trend will continue to increase, given the war with Iran that will affect prices through disruptions in the fertilizer supply chain and increased energy prices'. Dutch food inflation is also expected to rise during 2026.