Page 234 - RusRPTAug24

business, threatening long-term global food security. In particular, 33% of urea imports, the cheapest form of nitrogen fertilizers, come to the EU from Russia. Last year, the volume of deliveries came close to setting a record. For example, imports to Poland increased to almost $120M against $84M in 2021. "We are flooded with fertilizers from Russia, which are much cheaper, because Russian producers pay pennies for natural gas. If politicians do not act, Europe's production capacity will disappear," said the CEO of the largest ammonia producer in Germany, SKW Stickstoffwerke Piesteritz. The CEO of Yara International, one of the world's largest producers of nitrogen mineral fertilizers, said that Europe is "lunatically" dependent on Russian fertilizers. The sanctions provide exceptions for Russian food and fertilizers, so Moscow uses this loophole while other major players leave the European market.
Russian Fertiliser Exports to EU Surge Amid Rising Gas Prices and Production Shifts. From January to May 2024, Russia exported 1.9 million tonnes of fertilisers to the European Union, driven largely by high natural gas prices that have forced European chemical factories to reduce their own fertiliser production. This shift highlights the growing reliance of EU countries on Russian fertilisers, especially nitrogen-based types, which constitute 57% of these imports.
The demand for Russian nitrogen fertilisers rose by 39%, amounting to 1.1 million tonnes during the first five months of 2024. Poland emerged as the largest importer, accounting for 25% of these imports, followed by France (12%), Germany (11%), and Italy (10%).
In addition to nitrogen fertilisers, there was a significant increase in the import of potash and complex fertilisers. Potash fertiliser imports from Russia to the EU quadrupled to 182.5 thousand tonnes, while complex fertilisers saw a twofold increase, reaching 619.6 thousand tonnes.
The European statistical agency attributes this trend to the prohibitive cost of natural gas, which has made domestic fertiliser production economically unviable for many EU manufacturers. Consequently, importing Russian fertilisers, despite additional logistics costs, remains more cost-effective for European agricultural producers.
Russian fertilisers have not been subjected to the same sanctions as other Russian exports, allowing continued access to the EU market. Additionally, Russia benefits from low domestic production costs, maintaining its competitive edge globally. This is crucial as the EU has accounted for approximately 20% of global fertiliser imports over the past five years.
In 2023, global and EU fertiliser imports declined in value, following a sharp rise in fertiliser prices in 2022. Despite this, Russia's share of the global fertiliser market exceeded 16% in 2023, a rise from nearly 15% in the previous five years, largely due to reduced exports from other key suppliers like
234 RUSSIA Country Report August 2024 www.intellinews.com