To ensure that arable farmers in Russia will have sufficient fertilizer next spring, the country will tax and curtail its export. What consequences does this have for farmers in Europe and the Netherlands? Will the price rise further or will fertilizer no longer be available at all?
As with the 'wheat tax', it is once again President Vladimir Putin who is interfering with the subject. In this case fertilizer. He openly raised concerns over the availability and price of fertilizers for farmers in the country. In a direct or indirect sense, the export barriers to Russian fertilizer are coming to light. Prime Minister Mikhail Mishustin announced the news on state television on Wednesday, November 3.
Figures in line with export level
Various fertilizers are taxed and restricted for a period of six months. This period will reportedly start in December. This mainly concerns nitrogen fertilizer because the price has gone through the roof worldwide. The government limits its export to 5,9 million tons for the basic fertilizer. Processed fertilizer containing nitrogen is limited to a level of 5,35 million tons. Analysts do not expect this limit to have much effect on exports because the figures are in line with the country's export level.
There is still a catch because it is not yet clear what the proportions are for the specific fertilizers. For example ammonium nitrate and urea. The Russian organization of fertilizer companies does not expect exports to be hampered. The current division between fertilizers is maintained by the government.
Cheap gas
The current measures are not expected to have a major impact. However, it does put the fertilizer market further on edge. Especially after China before announced to limit the export of fertilizers. What plays a role in the EU is that there is an import tax on fertilizer from Russia, among others set. This should protect European factories that believe there is unfair competition. For example, Russian fertilizer factories have the advantage of a fixed gas price. The government has extended the frozen gas price policy until 2022. The cost price has therefore not increased - unlike in the EU and US. The export of potash from Belarus is also increasing charge by the EU.
The tax on fertilizer from Russia and the US is now causing farmers in Europe extra pain because it makes fertilizer unnecessarily expensive. This is the opinion of the interest group Copa-Cogeca, which has previously advocated the abolition of anti-dumping measures. The latest news from Russia will probably do little to change the market situation in our country and elsewhere in the EU. However, it does put the international market on edge.
Availability
Prices for nitrogen fertilizer in particular have tripled in the EU this autumn. In addition, availability is a problem, because factories have significantly scaled down their production after skyrocketing gas prices. It is therefore feared that there will be a shortage of fertilizer next spring, as well as high price levels. In the Netherlands too, it has become almost impossible to secure fertilizer for next season.