Europe continues to sanction Russian fertilizers despite local production issues

Deepika Thapliyal

01-Aug-2022

LONDON (ICIS)–In Europe, imports of Russian fertilizers remain sanctioned even after Russia and Ukraine signed separate agreements with Turkey and the United Nations, clearing the way to export millions of tonnes of Ukrainian grain and Russian grain and fertilizer products.

The Razoni, a cargo ship loaded with 26,527 tonnes of corn, left Ukraine for Lebanon today, according to the United Nations.

Another 16 ships, loaded with grains, are waiting in Odessa to sail.

The situation with Russian fertilizer shipments is largely unchanged, and imports are still not allowed into Europe.

Russian fertilizers are allowed into Central/Latin America, India, Turkey and the US, while the EU has imposed strict sanctions since Russia’s invasion of Ukraine on 24 February.

There is still some Russian fertilizer moving into Europe under the radar, but the quantity is small.

In 2021, Russia’s market share for urea sales to France and Spain was 10-11%, at around 150,000 tonnes and 100,000 tonnes, respectively.

There has been talk about the European Commission softening sanctions on Russian fertilizers to avoid a food crisis in the region.

Fertilizer production in Europe has been hit due to skyrocketing gas costs, with the dependence increasing on imports.

Europe can however increase its purchasing from other regions such as North Africa, the Arab Gulf and Nigeria to make up for the shortfall in Russian product.

Russian fertilizer major EuroChem Group last week said it is facing daily operational difficulties due to ‘overcompliance’ by counterparties who fear violating EU sanctions, despite being excluded from sanctions in several countries.

Front page picture: The bulk carrier Razoni carrying Ukrainian grain sets off from the port of Odesa on Monday under an internationally brokered deal and is expected to reach Istanbul on Tuesday, where it will be inspected, before being allowed to proceed to Lebanon
Source: Michael Shtekel/AP/Shutterstock

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