Russia immediately bans the export of ammonium nitrate. The country is the world's largest producer of this fertilizer. The consequences are therefore great. It is difficult to say how it will affect the Netherlands, but the fertilizer market will again take a hit.
In November, the country announced that it would limit the export of ammonium nitrate. The export of nitrogen fertilizer was also restricted at that time. The reason for this at the time was to put a stop to price increases in the home country. Now it even fears a shortage in its own country. 'Farmer first' is President Putin's credo. The ban applies for two months, but insiders expect it will not stop there.
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Export market
Russia produces more than 60% of all ammonium nitrate in the world and is therefore an important player in the export market. The export ban does not have as much impact as China's, but it is annoyingly new for the fertilizer market worldwide. It is unknown how many tonnes of product the Netherlands imports. Statistics Netherlands only reports that our country imported €2019 billion worth of raw materials and fuels in 8,3. That includes all the Russian gas. This distribution is not disclosed for security reasons.
Ammonium nitrate is not used as a pure fertilizer, but as a component in special fertilizers. The fertilizer is also produced in our country. At OCI in Geleen and at Yara in Sluiskil. There is therefore most likely no shortage, although an upward price movement on the international market may be reflected in prices here.
Controversial fertilizer
Ammonium nitrate – a widely used fertilizer worldwide – is highly controversial due to its explosive nature. Things have gone wrong several times in the last twenty years. The last time this happened was in Beirut, Lebanon, when a port facility exploded. There have also been accidents in the US, China and France in the past two decades. For that reason, its use is prohibited in our country. The production is only for admixture in other fertilizers, says Meststoffen Nederland.
The price of urea on the world market has been falling for several weeks. Better availability of gas, and therefore falling prices, is the cause of this. It is difficult to say how this translates into the Dutch situation. Suppliers do not allow price statements to be elicited due to the volatile nature of the market. The question is whether all delivery obligations can be met. The current political situation in Ukraine – and the possible consequences for gas supplies – make the situation even more uncertain.
No decline expected
A boon for the energy market is a mild winter in this region of Europe, which means less demand on gas supplies. In addition to export restrictions, sky-high transport costs also play a role in the case of fertilizers and raw materials from China. The fertilizer market is therefore not expected to provide much relief for the 2022 season.