On December 1, Russia introduced quotas for the export of mineral fertilizers for the first time in history. They will affect the most demanded species during the spring sowing - nitrogenous and complex ones. The established quota is roughly comparable to the volume of supplies abroad, so companies will not have to reduce them. But it will not be possible to increase exports either, which could deepen the global deficit of fertilizers and raise prices.
On the instructions of Russian President Vladimir Putin, the government limited the export of two types of fertilizers for six months, Prime Minister Mikhail Mishustin said at the meeting. In particular, a quota of 5,9 million tons is introduced for nitrogen fertilizers, and 5,3 million tons for complex fertilizers (NPK). The Ministry of Industry and Trade, together with the Ministry of Agriculture, must distribute the volumes among exporters by November 25. The quotas themselves will take effect on December 1. The situation will affect almost all the largest Russian producers: Eurochem, which accounts for a quarter of the total volume of nitrogen fertilizers and more than 15% of complex fertilizers, Acron (18% of nitrogen and 14,5% of complex), Uralchem (11%), Phosagro "(9,5% nitrogen and 49% complex).
As the prime minister explained, this is being done in order to prevent the redirection of volumes from the domestic market to foreign ones against the background of a deficit developing there.
The main reason for the deficit is the rise in the price of raw materials - gas, due to which a number of world producers were forced to cut production or completely shut down factories.
Prior to this, the Ministry of Finance proposed to prohibit the use of simplified declaration procedures for the export of nitrogen, phosphorus (DAP, MAP) and complex fertilizers. At the same time, these measures will not apply to these products when they are exported under export licenses issued by the Ministry of Industry and Trade.
Disputes between agrarians and chemical companies about the volumes and prices of fertilizer supplies, which traditionally took place almost before each sowing campaign in recent years, have escalated this year due to a sharp rise in prices for chemical products. Thus, the cost of nitrogen fertilizers, which is the main type for the spring sowing, equaled the price of phosphorus fertilizers (over $ 800 per ton in Europe), although traditionally they are about half the price.
In Russia, according to Rosstat, by August 2021, prices for ammonium nitrate increased from the beginning of the year by almost 30%, and on an annualized basis - by 70%, by the previous month - by 2%, for urea - by 72%, 43% and 5%, respectively.
Agricultural companies are counting on the effectiveness of the introduced measures to restrict exports and consider them necessary.
Source: Agrovestnik