/Pogled.info/ The West again increased the purchase of Russian fertilizers. The EU chemical industry is unhappy: the dominance of cheap imports is harming its own production and generally putting food security at risk. Why not push the “toxic” products out of the European market?
Constant search
Due to the refusal of Russian gas and the energy crisis, the price of fertilizers in the EU jumped 150 percent. There was a deficit. The West has not yet decided to impose sanctions in this region. According to the Food and Agriculture Organization of the United Nations, Russia is the largest exporter of nitrogen fertilizers in the world, the main exporter of potassium and phosphorus.
In 2023, Europe significantly increased imports of Russian nitrogen fertilizers. Germany – almost double compared to 2022 and more than seven times compared to 2021, up to 550 thousand tons. France – with a quarter and two hours to 440 miles, respectively.
This year the picture is the same: more than 39%, 1.1 million tons in five months. And nitrogen fertilizers represent 57% of the total chemical imports from Russia. Poland (25%), France (12), Germany (11) and Italy (10) are the main users.
We bought more
In June, as follows from the “Eurostat” report, after three months of reduction, the EU unexpectedly increased the purchase of fertilizers – by 15%, to 275 thousand tons (in May it was 239). In monetary terms – by 16%, up to 90.1 million euros.
The result for the half year is 739.7 million euros, which is a quarter more than the same period of 2023. In physical terms – one and a half, 2.2 million tons.
Poland is still ahead of everyone – more than 14.2%, 82.2 thousand tons. Germany bought 55.9 thousand tons.
“This is due, firstly, to the fact that chemical plants in the EU can stop in June for planned repairs, and, secondly, the prices are favorable,” notes Leonid Khazanov, an independent industry expert .
Hard times
The EU is not happy about this. Fertilizer dependence has replaced energy dependence, says Svein Tore Holseter, CEO and president of Norwegian chemical company Yara. This directly threatens the food security of the West, experts emphasize.
However, nothing could be done: expensive gas forced chemical concerns to abandon their own production. The price has increased so much that it has made the business unprofitable. This was also noted by the European Statistical Agency.
As former suppliers told the Financial Times, they will have to close factories or the possibility of moving outside of Europe.
EU industry was hit hard by the unprecedented rise in natural gas prices. By 2023, 40-50% of ammonia production capacity (the main raw material for nitrogen, phosphate and complex fertilizers) has not been used, according to the industry association “Fertilizers of Europe”.
Years of crisis are coming to the industry, said Benjamin Lakatos, CEO of the Swiss energy company MET.
Since then, the situation has calmed down a bit, but 10-20% of capacity is still in hiatus, and several large enterprises are permanently closed. Among them is an ammonia plant in Ludwigshafen, Germany, owned by the chemical concern BASF.
The market leader, the Norwegian “Yara” reduced production by 40%. The British “CF” closed two factories.
The industry is confident that it is only a matter of time before the big players are removed from the market. “Sooner or later everyone – including us – will suffer this fate,” said Petr Zingr, chief executive of SKV, Germany’s largest ammonia producer. If politicians “continue to do nothing”, he said, European fertilizer production “will disappear”.
The product is completely dependent on Russian and Belarusian imports. And with such leverage, Moscow and Minsk will be able to achieve a lot from the EU.
According to the consensus forecast for the development of fertilizer production, chemicals on the European market will continue to rise in price this year. And in 2025-2026, they will not be cheaper.
Russia expects to grow in the production and export of all types of fertilizers: nitrogen, potassium and phosphorus. Consistently high prices guarantee this. By 2026, the country will produce 7% more urea, 3.2% more phosphate fertilizers and 2.5% more potassium. Total – about 34.7 million tons. Of these, up to 26 million are for export, which is growing 4-7.8% per year. The European market will also continue to expand, but Brussels is not at all happy about it.
Translation: V. Sergeev
2024-08-24 03:27:13
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