Andrey Guryev：Russian fertilizer exports are expected to rebound to record highs this year.
Following the Russia-Ukraine conflict, fertilizer exports from Russia and Belarus were severely disrupted due to related sanctions, triggering a worldwide fertilizer shortage last year.
However, this year the situation is clearly different. According to Andrey Guryev, head of the Russian Association of Fertilizer Producers (RAPU), Russia is gradually returning to selling fertilizer to the international market and could return to the record high export levels of 2021.
Guryev said this year's full-year export record may not be comparable to the past, but fertilizer exports from the start of the second quarter through the fourth quarter could easily reach the same level as the same period in 2021.
However, he also pointed out that although the general export volume of Russian fertilizers is recovering, the supply of potash will still decline in year-on-year terms.
Potash supply will still decline
In terms of volume, Russia's fertilizer exports could recover to about 38 million tons this year, according to Guryev. Last year, Russian fertilizer producers' output fell 11 % to 23.5 million tons due to sanctions, including a 32 % drop in potassium chloride production to 7.3 million tons.
RAPU explained that the drop in production was due to export cuts and weak demand for fertilizer products in Russia.
But according to Michael Nash, senior editor at Argus Media, Russian fertilizer has actually been flowing around the world in 2022, with large amounts going to Western countries such as the United States, the Netherlands, Germany and France, contrary to popular belief.
Nash revealed that Russia exported 7.9 million tons of urea in 2022, up 12 % from 2021. In addition to urea, Russia's exports of diammonium phosphate and monoammonium phosphate are also robust. Therefore, Russia's exports of a wide range of fertilizer products have not really been hit much.
The real problem comes with potash, which Nash says Russia's potash exports are down 37% in 2022 compared to 2021. And Russia and Belarus together account for 41% of global potash trade, which is critical to world supply.
Potash and phosphate are very price-sensitive and can easily be abandoned at high prices, with farmers turning to increased application of nitrogen fertilizers. However, potash and phosphate are important for maintaining soil health, and their reduced use will affect crop yields over a longer period.
The African region is still heavily impacted
On the other hand, soaring fertilizer prices last year put many developing countries in a difficult position. Unlike Europe and the United States, which have found alternative supplies, South America and Africa have been particularly affected by the reduction in fertilizer exports from Russia.
This year, although fertilizer prices have fallen sharply compared to last year, but due to global inflation has not been resolved, many African countries cannot afford to buy fertilizer.
Meanwhile, Russian is also demanding that the Black Sea Grain Initiative include the restart of Russia's ammonia pipeline to the Ukrainian port of Pivdennyi, which can transport up to 250 tons of ammonia per year. Russia has warned that the Black Sea Grain Initiative will not be extended beyond July 17th if it fails to improve conditions for Russian grain and fertilizer exports.
Ukraine says the restart of the pipeline will also be considered by the Ukrainian side if the Black Sea Grain Initiative expands and guarantees more exports of other Ukrainian commodities.
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