Russian gas exports to Europe have significantly decreased due to sanctions and counter-sanctions. However, supplies of Russian nitrogen fertilizers, which are derived from gas, have increased.
In 2023, Russian chemical companies increased sales of nitrogen fertilizers in Europe. This is reported by “Kommersant” with reference to the research of the Centre for Price Indices (CPI). According to its data, Germany has increased purchases compared to 2021 more than seven times – up to 550 thousand tons. At the same time, France imported twice as much as before – 440 thousand tons.
“Experts note that Russia retains the first place in nitrogen fertilizer imports to EU countries, and its share in total imports grew by two percentage points to 24% last year. Other major suppliers to the EU are Egypt, Algeria and the US,” Kommersant writes.
The growth of Russian fertilizer supplies to Europe is linked to high gas prices in the region. In the fourth quarter, Russian export prices for urea were lower than the cost of its production in Europe, according to calculations by the Central Centre.
The publication’s source said that nitrogen fertilizer exports are growing mainly due to increased shipments to Western European countries: “Nitrogen fertilizer exports to non-EU countries increased by 4.5 million tons (up 60%) to 12 million tons in 2022 and remained high through 2023, he said. Overall, the global nitrogen fertilizer market is 245-250 million tons per year, of which Russia produces about 11.5% – 28.5 million tons per year”.
The risk for Russian chemical companies is that the price of gas in Europe is falling and, at a certain level, will increase the profitability of European production, which could lead to a reduction in nitrogen fertilizer imports from Russia.
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