Export and import of fertilizers in Russia

Main article: Russian Foreign Trade

2024: Growing fertilizer exports to the EU

In June 2024, European fertilizer producers oppose large imports from Russia. According to Eurostat, about a third of urea imports to the EU come from the Russian Federation, and in 2023 the volume of supplies was almost a record.

The flows are undermining efforts to reopen capacity that has been idled by the energy crisis, according to lobbying group Fertilizers Europe.

2023

Russia doubled fertilizer supplies to Africa - up to 1.7 million tons

In the period from 2018 to 2023, Russia more than doubled the supply of mineral fertilizers to African countries - from 772 thousand tons to 1.7 million tons. This was announced by the Russian Association of Fertilizer Producers (RAPU) in early August 2024.

As noted by the executive director of RAPU Maxim Kuznetsov, in 2023, 59 million tons of mineral fertilizers were produced in Russia. Over 10 years, the volume of production of these products in the country has increased by 50%. Such rapid growth is the result of large-scale investments in the development of the industry, which exceeded 1.8 trillion rubles over 10 years. In 2023, the industry was able to reorient cargo flows in difficult geopolitical conditions and strengthen the status of one of the largest exporters of fertilizers in the world with a share of 18%.

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Russian producers are aimed at expanding cooperation with partners from Africa, given the acute task facing the countries of the continent to increase agricultural production. So, in 2023, Uralchem announced its intention to increase the supply of fertilizers to Africa tenfold. At the same time, the director of Fosagro, Mikhail Rybnikov, said that the company intends to double the supply of its products to Africa in the future for three years. According to the results of the first six months of 2024, the Fosagro group increased shipments of fertilizers to African countries by 74%. For five years, Fosagro has increased supplies to Africa almost fivefold - from 118 thousand tons in 2018 to 557 thousand tons in 2023.

In addition to increasing supply volumes, Russian fertilizer producers are constantly expanding their product range. Thus, companies create new brands with a minimal acidifying effect - this is especially true in African countries due to the increased acidity of soils. Brands have been developed with a high rate of dissolution of granules, brands in the form of liquid droplets that maintain the availability of nutrients without water, which is important in an arid climate. There are brands with additional content of calcium, magnesium, sulfur and trace elements - zinc and boron.^[1]

India became the leader in the growth of fertilizer imports from Russia

In July 2024, it became known that India came to a leading position in terms of the growth rate of fertilizer imports from Russia. This happened against the background of the introduction of Western sanctions against the Russian economy, which led to a significant change in the geography of exports of Russian mineral fertilizers.

According to Prime, the volume of supplies of Russian fertilizers to India by the end of 2023 almost tripled, reaching 4.3 million tons. The main increase was provided by phosphorus fertilizers, the demand for which is traditionally high in India. The share of Russia in the total volume of Indian fertilizer imports reached 25%, which indicates a significant strengthening of the position of Russian producers in the Indian market.

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Fosagro, one of the world's largest producers of phosphorus-containing fertilizers, notes that almost a third of its total exports came from India. In 2023, the supply of Russian fertilizers to this country increased another 1.5 times compared to 2022.

The Indian market is of particular interest to Russian fertilizer producers. Rural India's economy provides work for every second working resident of the country, and the annual volume of fertilizer imports exceeds 22 million tons, half of which are phosphorus.

In the next five years, the annual growth of the Indian fertilizer market will be twice the global average, Fosagro reported in July 2024. The company plans to further develop trade with India. The company intends to expand the range of exported products to include technical phosphates for industry and building materials. Particular attention is paid to the supply of phosphogypsum, the use of which can help reduce costs in road construction in India.

In addition, the Indian side expressed its readiness to support the development of the digital educational platform Pro Agro Lectorium, launched by Fosagro in 2023 for foreign farmers.^[2]

Growth in fertilizer exports to India by 1.5 times to 5.4 million tons

In 2023, Russia supplied 5.4 million tons of mineral fertilizers to India, which is 1.5 times more than a year earlier. This is evidenced by data from the Indian Ministry of Trade and Industry, published in February 2024.

According to Vedomosti, citing materials from this ministry, the growth in fertilizer imports from Russia to India in 2022 compared to the previous year was even more serious - 3.2 times in supplies to 3.6 million tons and 5.6 times in monetary terms to $2.7 billion.

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Russia's share of total fertilizer imports to India in 2023 increased from 15% to 23.3%. At the same time, China (5.44 million tons; + 62% compared to 2022) became the largest supplier of these products to India in 2023. Russia and China provided half of Indian fertilizer imports for 2023. The top five also included Saudi Arabia (2.5 million tons), Oman (2.2 million) and Canada (1.2 million).

The Ministry of Industry and Trade of the Russian Federation told the publication that Russian supplies increased due to the sale of nitrogen fertilizers. At the same time, in monetary terms, exports decreased by 10.3%, to $2.4 billion. This is due to falling product prices and discounts. China, on the contrary, managed to benefit from the increase in fertilizer supplies, earning a total of $2.59 billion (+ 12% to the level of 2022).

Russia in 2023 increased the supply of nitrogen fertilizers to India - 2 times, up to 1.8 million tons, and the supply of potash fertilizers began - 951 thousand tons. At the same time, supplies of mixed fertilizers sank slightly - by 4.2%, to 2.6 million tons. According to experts, Asian markets are promising for exports, since they are most severely deficient in fertilizers, in particular potash. The production of mineral fertilizers in Russia in 2023 tentatively amounted to approximately 60 million tons.^[3]

Growth in fertilizer supplies to China by 1.7 times to 3.5 million tons

In 2023, Russia delivered 3.5 million tons of mineral fertilizers to China, which is 1.7 times more than a year earlier. This was announced at the end of January 2024 by the State Customs Administration (GTU) of the PRC.

As Interfax writes with reference to the materials of the department, in money, imports of Russian mineral fertilizers to China in 2023 reached $1.3 billion, an increase of 26% compared to the volume of a year ago. Shipments of potassium chloride (the main type of fertilizer imported by China from Russia) in 2023 amounted to 3 million tons against 1.7 million tons in 2022, and in monetary terms imports increased by a quarter to $1.1 billion.

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The news agency notes that the supply of potassium from Belarus to China in 2023 also increased and amounted to almost 3.5 million tons by $1.5 billion (against 1.9 million tons by $0.9 billion in 2022). For comparison: in 2021, 2.25 million tons of chlorocalium from Russia and 1.75 million tons from Belarus were imported to China.

According to the calculations of the State Customs Administration (GTU) of the PRC, imports of Russian complex fertilizers to China in 2023 increased 1.6 times in physical terms (up to 0.4 million tons) and 37% in US dollars (up to $183 thousand).

In November 2023, the Russian government approved quotas for the export of mineral fertilizers from the Russian Federation for the period from December 1, 2023 to May 31, 2024 in the amount of 16.95 million tons. According to the decree of the Cabinet of Ministers, the quota for the export of nitrogen fertilizers (urea, urea-ammonia mixture, ammonium nitrate) will be 9.8 million tons, complex fertilizers - 7.1 million tons. Quotas will not affect exports to the countries of the Eurasian Economic Union. The government explained that this decision "is aimed at maintaining sufficient volumes of fertilizers in the domestic market." The distribution of volumes between exporters is carried out by the Ministry of Industry and Trade.^[4]

2022

Growth in revenue from fertilizer exports by 1.5 times to $19.3 billion

Russia in 2022 increased revenue from the export of fertilizers by 1.5 times - up to $19.3 billion. Such data in mid-March 2023 were published in the Federal Customs Service (FCS) of the Russian Federation.

According to statistics of the department, the volume of fertilizer imports in monetary terms at the end of 2022 increased more than 2 times, to $351.6 million. According to Russian Railways, the physical volume of fertilizer exports in 2022 fell by 23%, to 31 million tons.

Revenue from fertilizer exports in 2022 rose to $19.3 billion

The main obstacles to the export of Russian fertilizers are not duties, but logistics problems, said Alexey Kalachev, an analyst at FG Finam. He recalls that Russian fertilizers did not fall under direct sanctions: the United States added fertilizers to lists not subject to restrictions, and issued a general license for settlements for them in dollars, and Europe, which did not impose direct restrictions, announced its intention to facilitate the export of Russian fertilizers.

The Financial Times (FT), citing UN data, writes that revenues of Russian fertilizer exporters in January-October 2022 increased by 70% (to $16.7 billion) due to rising prices and despite a 10% drop in sales. Food and fertilizer supplies from Russia were excluded from Western sanctions in order to support food security, the FT notes. Importers included India, Turkey and Vietnam.

Clearly, countries like India were the biggest beneficiaries [in terms of fertilizer imports], said Josef Schmidhuber, deputy director of markets and trade at the UN Food and Agriculture Organization (FAO).

From January 1, 2023, duties on the export of fertilizers came into force, which will be valid throughout the year. Analysts believe that under sanctions restrictions from the West, duties can reduce the income of producers, but are unlikely to lead to a further reduction in production and exports.^[5]

Exports of Russian fertilizers decreased by 15%

In 2022, Russia supplied 15% less fertilizers abroad than a year earlier, when the export volume was measured at 37.6 million tons. This was announced at the end of December 2022 by the President of the Russian Association of Fertilizer Producers (RAPU) Andrei Guryev. According to him, export indicators were higher than the values ​ ​ predicted in mid-2022.

Russia, China and Belarus control most of the world's fertilizer production, which causes concern for the United States and its allies amid a crisis in relations between the countries.

In the summer, we estimated a 20% reduction in exports. This confirms that Russian manufacturers, starting from June-July [2022 - approx. TAdviser], began to recover from sanctions pressure, find new alternative methods of supply - to leave the Baltic ports for the ports of the Russian Federation, increase supplies to the markets of friendly countries, - said Guryev (his words with reference to the press service of RAPU leads Interfax).

Exports of Russian fertilizers decreased by 15%

India became the leader in increasing purchases of Russian fertilizers in 2022: supplies to this country almost tripled, to 3.6 million tons, mainly due to phosphate fertilizers, he said. Deliveries to the Middle East (primarily to Turkey) increased by 40%, to 0.7 million tons.

At the same time, shipments of Russian phosphate fertilizers to Europe this year decreased by 1.5 times - to 2 million tons, of which half were delivered before the imposition of sanctions. The export of potassium chloride from the Russian Federation to Europe fell by 1.2 million tons - to 0.7 million tons.

According to RBC, the West did not impose direct restrictions on the supply of fertilizers from Russia, but the Russian authorities insist that sanctions against the country led to supply problems. The lifting of restrictions on the export of fertilizers and various agricultural products became part of the grain deal of Moscow, Kyiv, Ankara and the UN. The parties signed the agreement in July, but it is only partially implemented - in relation to the export of Ukrainian grain, Russia has repeatedly stated.^[6]

2021: Russia is a key global supplier of fertilizers: nitrogen, phosphate and potassium

For example, in Europe, fertilizers from Russia in 2021 occupied more than 20% of imports.

Yellow dots - Russia's share in fertilizer imports by country

According to the Federal Customs Service of Russia, at the end of 2021, the export of mineral nitrogen fertilizers from the Russian Federation reached 14.5 million tons ($4.5 billion in monetary terms), the volume of exported potash fertilizers exceeded 11.9 million tons (worth $3.3 billion), mixed fertilizers - more than 11 million tons ($4.7 billion). 20% of Russian supplies are to the European Union and the United States, 7% - to China. The share of Russian fertilizers in supplies for the EU and the United States is 11-12%.

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