World Grain - November 2024 - 38

Playing
Russian roulette
with fertilizers
EU debating whether to restrict imports from Russia
by World Grain staff
R
ussian fertilizer exports are booming, largely
driven by soaring sales to European customers.
The trend sparks fierce debates in Europe
on whether to subject fertilizer flowing from the east
to restrictions, which could fuel food inflation in the
European Union (EU). However, an alternative might
be much worse, as the risk of fertilizer imports eventually
being weaponized by Russia is increasingly
possible.
The EU scaled up Russian fertilizer imports in July
to their highest point in 20 months, pushing Russia's
share in European purchases above 30% for the first
time since the onset of the Ukrainian war, according to
Eurostat data.
Russia's fertilizer exports to the EU rose by 120%
compared to June and 70% compared to July 2023,
reaching €199 million.
Poland became Europe's largest sales market for
Russian fertilizers, doubling its purchases to €55.7
million. France saw a fivefold rise in imports to €31.5
million, and Germany expanded imports by a third to
€24.5 million.
In July, Russia was the leading supplier of fertilizer
to Europe with a 31% stake, followed by Morocco with
€111 million and Egypt with €85 million.
The recent surge in sales triggered a crisis in the
European fertilizers industry in which profitability is
teething to an edge, though a few years ago quite a few
38
market players harbored ambitious expansion plans.
Fertilizers Europe, a Brussels-based lobby group, is
confident.
" Benefiting from very low, state-regulated gas
prices, Russian fertilizer producers have adopted an
aggressive price-undercutting
strategy resulting in
pushing domestic fertilizer producers out of business, "
said Łukasz Pasterski, a spokesperson for Fertilizers
Europe. " Around 20% of the EU's production capacity
is temporarily offline. The longer the situation
lasts, the greater the risk of temporary closures becoming
permanent. "
Fertilizers Europe is calling on the EU and member
states officials to take measures to reverse this growing
negative trend.
Europe is no stranger to sanctions against fertilizer
imports. Belarus, a large potash producer, has been
banned from selling its fertilizers to the EU. As a result,
over the past several years Belarussian fertilizers in
Europe largely have been replaced by deliveries from
Canada and Israel, said Doriana Milenkova, analyst for
Farm Inputs and Sugar with Rabobank's RaboResearch.
" Russia, on the other hand, is not banned from exporting
fertilizers, as EU sanctions explicitly exclude
food supplies and fertilizers, " Milenkova added.
The recent hike in deliveries primarily is attributed
to a recovery trend.
" Trade data indicates that the share of Russian prodNovember
2024 / World Grain / World-Grain.com
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World Grain - November 2024

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