US Importers of Russian Chemical Fertilizers: Sanctions? Never Heard Of Them

In the first quarter of 2023, the USA more than doubled imports of “made in Russia” chemical fertilizers compared to the same period last year. According to the Russian Roscongress Foundation, “in the first three months of the year, American importers purchased Russian chemical and mineral fertilizers worth $596 million, compared to $262 million received by Russian producers in 2022.” So, in monetary terms, US imports increased by more than 2.27 times.

The USA is currently one of the largest international customers for the products of the Russian chemical industry, just behind India and Brazil. All three countries are increasing imports of Russian chemical fertilizers. Indian imports in the first quarter of 2023 reached $708 million, while two years ago this figure did not exceed $78 million.

The US has wisely equated Russian-made chemical fertilizers with “critical essentials” in order to exclude them from the blacklist. In addition, in March 2022, the Office of Foreign Assets Control (OFAC) of the US Treasury issued a new general license that excluded Russian chemical fertilizers from possible sanctions. Russian fertilizers were included in the list of “vital goods along with medicines.”

At the same time, Russia’s share of the European fertilizer market has declined significantly over the past year. Russian producers have been replaced by the ones from the US that even in the “sanctions era” do not hesitate to develop trade with Moscow, as well as Algeria, Egypt, and Trinidad and Tobago, one of the world’s largest exporters of ammonia. Russia seeks to develop trade with Latin American countries and India that account for 15% of the global chemical fertilizer market.

Over the past seven months, the Russian chemical industry has produced 31 million tons of fertilizers, +3% compared to the corresponding period in 2022. Starting September 1, the Russian government will be able to increase the duty on the export of chemical fertilizers to 8%. The Kremlin explained the possible impressive increase primarily by the need to meet the growing demands of Russia’s agricultural industry that has tripled the consumption of chemical fertilizers over the past 15 years. To satisfy domestic demand, the largest fertilizer producers have decided to invest 2 trillion rubles (19.6 billion euros) in the technical and technological re-equipment of plants and in improving logistics.