Have Western sanctions on Russia impacted its fertiliser exports?

Russia is demanding the West removes obstacles to its grain and fertilisers in talks underway in Turkey on Thursday on extending a deal allowing safe Black Sea exports of agricultural products from three Ukrainian ports.

WHAT DOES MOSCOW WANT?

Moscow's demands for renewing the deal it says has mostly benefited Ukraine include the reconnection of the Russian Agricultural Bank (Rosselkhozbank) to the SWIFT global payment system, and the unblocking of Russian food and fertiliser exporters' overseas assets.

It also wants an ammonia pipeline that flows from its territory to Odesa, Ukraine, to start running again.

Ammonia is a key input for nitrogen-based fertilisers. For most crops, these fertilisers are far more important than phosphate and potash-based fertilisers.

HAS THE WEST SANCTIONED RUSSIAN FERTILISER EXPORTS?

Western countries have not imposed any sanctions on Russian food and fertiliser exports in response to Moscow's invasion of Ukraine last year, but Moscow says its exports are hampered because sanctions make it harder for traders to process Russian payments or to obtain vessels and insurance.

Also, some individuals linked to major fertiliser companies such as EuroChem founder Andrey Melnichenko, Uralchem's Dmitry Mazepin and Acron Group's Viatcheselav Kantor have been placed on European Union sanctions lists.

These sanctions have made it more complicated for the companies to operate and more than 400,000 tonnes of fertiliser were initially stranded in European Union ports, though some have now been released and exported to Africa.

WHAT DOES EXPORT DATA SHOW?

According to commodity price reporting agency Argus, Russia - which has some 20% global market share in urea - shipped 7.9 million tonnes of the nitrogen-based nutrient last year, up 12% versus 2021.

Russia is also a key exporter of potassium-based fertilisers diammonium and monammonium phosphate (DAP and MAP), with about 15% global market share. Its shipments rose 9% last year versus a year ago to just over 4 million tonnes.

Russia's exports of potassium-based fertiliser muriate of potash (MOP) however, fell 37% in 2022, according to Argus, and it has not exported any ammonia since the war began because its pipeline, which runs to Ukraine's Black Sea port of Pivdennyi (Yuzhny), remains shut.

Russia has some 30% global market share in ammonia and MOP exports, making it the world's largest and third largest exporter, respectively.

HOW IMPORTANT IS RUSSIA AS A FERTILISER PRODUCER?

Russia is one of the world's largest producers and exporters of potash, phosphate and nitrogen-containing fertilisers. It produces more than 50 million tonnes a year, 13% of the global total.

For a breakdown of Russia's global market share in different fertiliser products click here.

HOW HAS THE CONFLICT IMPACTED WORLD FERTILISER PRICES?

In the months that followed Russia's Feb 24 invasion of Ukraine, benchmark prices for key fertilisers like diammonium phosphate DAP-NOLA-P1 and urea UREA-GRNOLA-P1 rose to decade and record highs, respectively.

They are now down some 50% off those peaks, however, as Russian exports are at normal levels, new capacity has come online, much of the previously curtailed EU production is back up, and demand remains weak.

Prices for potassium-based MOP are meanwhile down some 60% from their 2022 highs, thanks mostly to weak demand, according to Argus, which notes the price fall has occurred despite Russian MOP exports dropping 37% last year.