World faces food crisis due to war in Ukraine, says Russian billionaire Melnichenko
- The global food crisis is brewing – Russian billionaire
- The war in Ukraine must end – Melnichenko
- Many farmers have already exhausted the price of fertilizer
- Russia suspends fertilizer exports
LONDON, March 14 (Reuters) – A global food crisis threatens if the war in Ukraine is not stopped as fertilizer prices soar so fast that many farmers can no longer afford soil nutrients, the Russian fertilizer and coal billionaire Andrei Melnichenko.
Several of Russia’s wealthiest businessmen have publicly called for peace since President Vladimir Putin ordered the February 24 invasion, including Mikhail Fridman, Pyotr Aven and Oleg Deripaska. Read more
The United States and its European allies called Putin’s invasion an imperial-style land grab.
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They sanctioned Russian businessmen – including EU sanctions against Melnichenko, froze state assets and cut off much of Russia’s business sector from the global economy in a bid to force Putin to to change direction.
Putin refuses. He called the war a special military operation aimed at ridding Ukraine of dangerous nationalists and Nazis.
“The events in Ukraine are truly tragic. We urgently need peace,” Melnichenko, 50, Russian but born in Belarus and of a Ukrainian mother, told Reuters in a statement emailed by his spokesperson.
“One of the casualties of this crisis will be agriculture and food,” he said.
Melnichenko is the founder of EuroChem, one of Russia’s largest fertilizer producers, which moved to Zug, Switzerland, in 2015, and SUEK, Russia’s largest coal producer.
Russia’s invasion of Ukraine has killed thousands, displaced more than 2 million and raised fears of a wider confrontation between Russia and the United States, the world’s two largest nuclear powers.
Putin said last Thursday that food prices would rise globally due to soaring fertilizer prices if the West created problems for Russian fertilizer exports, which account for 13% of global production.
Russia is a major producer of fertilizers containing potash, phosphate and nitrogen – the main nutrients for crops and soils. EuroChem, which produces nitrogen, phosphates and potash, claims to be one of the top five fertilizer companies in the world.
The war “has already led to a spike in fertilizer prices that are no longer affordable for farmers,” Melnichenko said.
Food supply chains already disrupted by COVID-19 were now even more distressed.
“Now this will lead to even higher food inflation in Europe and likely food shortages in the world’s poorest countries,” he said.
The Russian Ministry of Trade and Industry asked the country’s fertilizer producers to temporarily suspend exports earlier this month.
International food and feed prices could rise by up to 20% due to the conflict in Ukraine, causing an increase in global malnutrition, the United Nations food agency said on Friday. Read more
Melnichenko, who was just 19 when the Soviet Union collapsed, started trading foreign currencies while studying physics at Moscow State University.
A mathematician who once dreamed of becoming a physicist, Melnichenko dropped out of college to delve into the chaotic – and sometimes deadly – world of post-Soviet affairs.
He founded MDM Bank, but in the 1990s he was still too minor to participate in privatizations under President Boris Yeltsin, which handed over the best assets of a former superpower to a group of businessmen who would become known under the name of oligarchs because of their political and economic weight. .
Melnichenko then began buying up often struggling coal and fertilizer assets. His fortune in 2021 was estimated by Forbes at $18 billion, making him the eighth richest man in Russia.
The European Union on Wednesday sanctioned Melnichenko for the Russian invasion. He said his participation in a Kremlin meeting with Putin and 36 businessmen organized by the Russian Union of Industrialists and Entrepreneurs showed that he was “one of the leading businessmen involved in the sectors economic”.
Melnichenko “has no connection with the tragic events in Ukraine. He has no political affiliation,” his spokesperson said.
“Drawing a parallel between attending a meeting by becoming a member of a works council, as dozens of businessmen from Russia and Europe have done in the past, and undermining or threatening a country is absurd and senseless,” the spokesperson said, adding Melnichenko will challenge the sanctions.
On March 9, Melnichenko resigned as a board member and non-executive director of EuroChem and SUEK, and stepped down as a beneficiary, the spokesperson said. EuroChem has production assets in Russia, Lithuania, Belgium, Brazil and Kazakhstan.
Italian police last week seized his yacht – the 143-metre (470ft) Sailboat A – which has a price tag of 530 million euros ($578 million).
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Reporting by Guy Faulconbridge; Editing by Susan Fenton and Angus MacSwan
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