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Strategic Assets

February 21, 2023 | Posted in: Insights

Early in the Ukraine conflict, I posted several blogs discussing potential global shortages due to the large role that Russia and Ukraine play in the production of foodstuffs, neon gas (a critical commodity used in the production of computer chips), and fertilizer. While there continue to be a smattering of articles in the media regarding food production, the subject of fertilizer has received scant coverage until last week when Bloomberg published an article titled Russia and China Have a Stranglehold on the World’s Food Security. As depicted below, China, Russia, and its ally, Belarus, are huge producers of the primary commodities used in fertilizer which is critical to the production of crops in most places.

Just as there has been considerable discussion and some concrete action aimed at increasing the domestic production of strategically important computer chips, fertilizer is now becoming a political and diplomatic hot potato. Morocco is attempting to expand its regional stature by using its phosphate production as a diplomatic tool and Canada is working hard to significantly increase its production of potash.

If there is a moral to the story, it is that we have all come to take for granted the instant availability and relatively modest cost of virtually anything that we wish to buy. Well, the pandemic and war have demonstrated that our comfortable consumer lifestyle is far from assured!