/Pogled.info/ The import of European fertilizers from Russia is again at the highest level, despite the sanctions. At the beginning of the year, the chemical industry demanded that “hostile” supply be limited: they managed somehow without energy resources. In addition, they complained about the low environmental friendliness of the raw materials. But they keep buying. Why can’t the West reject “harmful” products from the “aggressor country”?
They bought and collected
The European Union bought 521.3 thousand tons of Russian fertilizer worth 167 million euros in February, according to calculations based on European statistics.
This is 16 percent more in physical terms and 21 percent more in monetary terms compared to January. The highest since December 2022, when they were bought for €185.3 million.
Belgium increased its turnover in particular – almost five times, up to 24 million euros. Romania – 2.4 times, up to 10.3 million, Bulgaria – 2.1 times, up to 5.2, Germany – 1.8 times, up to 20.
Poland remains the largest customer for the third month in a row: 44 million euros – the highest level since December 2021.
According to the Food and Agriculture Organization, Russia is the world’s largest exporter of nitrogen fertilizers and a leading exporter of potassium and phosphorus fertilizers. In 2021, it gained more than 30 percent of the European market. And we are not talking about slowing down.
The locals are unhappy
About 60% of potash imports into the EU come from Russia and Belarus, and 31% of nitrogen comes from Russia. The European Union is not happy with this: there was energy dependence, now – fertilizers.
“We have clearly seen how Russia and Putin use fertilizers and food as weapons,” said Sven Tore Holseter, CEO of Yara’s Norwegian plant, months ago. According to him, 2024 will be a “decisive” year for the EU in agriculture.
The same thing was said earlier in the European Parliament: “Russia abused its dominance in gas supplies and turned fertilizer into a political tool, after attacking forced Ukraine, supplies were cut off and prices almost tripled Running a wave
In addition, the same Yara complained that the carbon footprint of Russian fertilizers is 50-60 percent higher than the European ones.
The concern about “ecology” is understandable: Russian companies have significant competitive advantages due to lower production costs. The EU introduced a cross-border carbon tax even before the CBO.
“In this way, they tried to weaken competition after the announcement of the sanctions, and then the explosion of the Nord Streams, not only the energy problem arose in Europe, but also the production of fertilizers, especially nitrogen, more difficult, “said Galina. indicating Sorokina, professor of international economic relations at the Russian State University.
They don’t have to choose
“Energy independence” and rejection of Russian pipeline gas are costing Europe dearly. In addition, the highly dynamic chemical industry had a major impact. By mid-2022, rising prices of blue fuel stopped at 70% of nitrogen capacity, production costs jumped 150. Dozens of factories closed.
Finland, Latvia, Lithuania and Estonia are particularly dependent on Russian supplies. They have limited resources and a historic trade relationship with Moscow. But countries with developed agriculture – France, Germany, the Netherlands – also need to import chemicals to maintain high productivity, notes Alexander Strelnikov, founder of transport company RusTransChina.
And Russian products are cheaper than European ones due to access to cheaper fuel and energy, the expert said. And geographical proximity is important.
Unlike other industries, in the chemical industry gas is not only a source of energy, but also a raw material.
“Nitrogen fertilizers (ammonia, urea, ammonium nitrate) are produced from natural gas. The value of hydrocarbons plays a big role”, said Prof. Mihail Akim from the Higher Institute of Applied Sciences.
Are there other options?
Ahema in Lithuania plans to build a plant designed to produce half a million tons of granular nitrate fertilizer per year.
Poland “Orlen” is ready to invest nearly 400 million. Now the plant, with a capacity of one million tons of nitrogen fertilizer per year, controls 25 percent of the domestic market. If the project is implemented, it will be a million and a half. But this is all in the long run.
Due to the complex situation in the agricultural sector, as well as the constant political actions of farmers, the EU cannot give up fertilizers from Russia. Other suppliers, mostly from Africa, do not meet the needs of the agricultural sector, the product itself is too expensive and farmers are too worried – as a result, imports are growing, explained Ivan Andrievsky, the first vice-president of the Union of Russian Engineers.
High integration
Economists say: the integration of the Russian economy with the European economy was much deeper than expected. Failure in one area of cooperation certainly affects others. In addition, fertilizer markets continue to be affected by volatile gas prices.
“Fertilizer producers are essentially ‘intermediate’ gas values, that is, in the context of sanctions and price imbalances in the markets, fertilizer conversion is an affordable substitute that allows to use Russia’s advantages,” explained Mikhail Akim.
“There is no direct trade restriction against fertilizers, there is an indirect restriction, including problems with the entry of Russian-flagged vessels into EU ports, the complexity of operations and sanctions against companies at are capital assets from Russia, as well as personal – of the owners.
However, Brussels will not rest. According to the representative of the European Commission Olaf Gill, the EU’s chief executive is investigating the import of Russian fertilizers and grain to see what measures can be taken against them. He confirmed that there are no sanctions yet because there is a risk of harming some European countries. That, he said, “has been the situation so far,” but “if further measures are needed, they will certainly be considered.”
Translation: V. Sergeev
2024-04-25 18:18:13
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