Agriculture Committee on Oct. 5th, 2022

[The Chair, Liberal, Kody Blois]

Thank you, Mr. MacGregor.

Colleagues, I don't do it often, but you know I used to love asking questions when I was not your chair. If you'll indulge me for about 90 seconds, I'm going to ask Mr. Thompson two quick ones.

Mr. Thompson, obviously the war in Ukraine has, I presume, created trade disruptions about the patterns. We actually heard that from Sollio a little bit today.

Can you give the committee a bit of a sense of who might still be buying Russian and Belarusian inputs for the fertilizer process, whether or not the war has had an impact in that domain, where Canada—whether it be companies like Nutrien or otherwise—can try to help fill that gap, and what that gap actually is?

[Mark Thompson]

I think the most illustrative example of the war in Ukraine specifically with regard to the fertilizers—and I've already talked about the impact on grains and oilseeds—is in potash fertilizers. If you look at the market for potash globally, it's about 70 million tonnes. Russia and Belarus account for about 40% of the global trade in potash.

Actually, in 2021, before the war broke out, Belarus had its own geopolitical issues as a result of actions it had taken that resulted in sanctions that severely disrupted supplies of Belarusian potash to the market. After the war broke out, what we saw was a combination of continued sanctions on Belarus, new sanctions on Russia and logistics disruptions as a result of the war. Therefore, our view is that we will see that 70-million tonne market and the supply available to that market reduced by roughly eight million to 10 million tonnes this year as a result of those disruptions.

Certain western nations and countries have elected to not purchase Russian or Belarusian fertilizers. However, in the case of potash, we are still seeing purchases from countries like Brazil, India and China.

In the case of Nutrien, as I said in my opening comments, we have accounted for about 70% of the increase in global potash production alone in the last two years and have made a commitment to increase our production volumes by three million tonnes over the next three years. We're the only producer globally that is in a position to do that, and we acted quickly because of this topic today—that we see a looming food security crisis—and are doing our part to make sure that growers have the potash they need, notwithstanding the supply disruptions in the former Soviet Union.

[The Chair, Liberal, Kody Blois]

I have just one quick question. For eastern Canada, speaking as a member of Parliament from Nova Scotia, we're hearing the conversation about Canada's self-sufficiency in fertilizer in western Canada versus eastern Canada and the inputs that come in.

Very quickly, is there a way to solve that? Is there a market-based solution that could help solidify Canada's self-sufficiency in fertilizer production east to west?

[Mark Thompson]

As I mentioned in my earlier comments, we do view fertilizer and agriculture markets as extremely efficient. We're proponents of a market that doesn't involve undue regulation that would cause distortion in what we view as otherwise very efficient markets.

In the case of fertilizer supply coming from western Canada, fertilizer pricing tends to be based on benchmarks plus transportation differentials. In the case of Nutrien, we have a very loyal, long-standing customer base in proximity to our facilities. We also have demand that we're serving. Therefore, if imports are coming in to the North American market, they're coming in because it is advantageous and economically competitive for them to be there. We believe that this continued global trade of fertilizers is necessary to meet demand around the world.

[The Chair, Liberal, Kody Blois]

Thank you very much.

Thank you, colleagues, for your quick indulgence on the questions.

That wraps up our panel and our session. I want to wish everyone a happy Thanksgiving and time back in your ridings. We will see you back the week of October 17.

Thank you so much, everyone. Take care.