The European Union recently announced that it was easing the sanctions levied on Russian fertilizer exports. While the move would undoubtedly ease the pressure on fertilizer prices and reduce farming costs from producers around the world, it has been met with rebuke from Ukraine.
The decision was preceded by a fight between Western European nations that were looking to reduce the restrictions placed on Russian fertilizer exports and Eastern European nations that wanted to maintain the sanctions.
The six Western European nations argued that the intermediaries tasked with handling shipments of Russian fertilizer stuck in ports could be held liable for violations. On the other hand, four Western EU member states led by Poland said that clearing these stuck Russian exports would allow the Kremlin to continue its invasion of Ukraine, and Russia’s fertilizer industry is effectively owned by oligarchs allied with President Vladimir Putin.
Ukraine was of the same opinion as the Eastern bloc, with Foreign Minister Dmytro Kuleba stating that this move would deal a blow to the entire sanctions regime, undermine global support for Ukraine and harm joint efforts to halt the Kremlin’s invasion. He added that Ukraine strongly opposed the move to allow Russian fertilizer exports and thanked the EU members that had fought against easing restrictions against Russia.
Soon after Russia invaded Ukraine in February, several Western countries issued a variety of sanctions against the Kremlin. These sanctions mostly involved banning Russian exports as a way to cripple its economy and harm the Kremlin’s war effort. The Kremlin responded by cutting the export of critical resources such as fertilizer and natural gas to the rest of the EU.
However, while Russia has managed to find new buyers for its exports in countries such as China and India in recent months, countries in the EU and the Americas have felt the impact of reduced Russian exports acutely.
Russia is one of the largest exporters of fertilizer in the world, accounting for around 15% of worldwide nitrogenous fertilizer exports. The World Bank also estimates that global fertilizer prices went up by almost 30% in the early months of 2022. This increase in price over the course of 2022 put immense strain on agriculture producers in the EU, U.S. and South America, with experts stating that the situation could descend into a global food crisis if fertilizer prices continue trending upward.
The EU’s recent announcement will finally open up the fertilizer supply chain and allow fertilizer prices to go down. Russia and Western European leaders also say that easing restrictions on Russian fertilizer could save territories such as Africa, which are staring down the barrel of famine.
As normalcy is restored to Russian fertilizer exports, the pressure exerted on the production systems of other players such as Compass Minerals International Inc. (NYSE: CMP) will ease while the supply chain stabilizes.
About MiningNewsWire
MiningNewsWire (MNW) is a specialized communications platform focused on developments and opportunities in the global resources sector. The company provides (1) access to a network of wire services via NetworkWire to reach all target markets, industries and demographics in the most effective manner possible, (2) article and editorial syndication to 5,000+ news outlets (3), enhanced press release services to ensure maximum impact, (4) social media distribution via the Investor Brand Network (IBN) to millions of social media followers, and (5) a full array of corporate communications solutions. As a multifaceted organization with an extensive team of contributing journalists and writers, MNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. By cutting through the overload of information in today’s market, MNW brings its clients unparalleled visibility, recognition and brand awareness. MNW is where news, content and information converge.
To receive SMS text alerts from MiningNewsWire, text “BigHole” to 888-902-4192 (U.S. Mobile Phones Only)
For more information, please visit https://www.miningnewswire.com
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.miningnewswire.com/Disclaimer
MiningNewsWire
Los Angeles, California
www.miningnewswire.com
310.299.1717 Office
Editor@MiningNewsWire.com
MiningNewsWire is part of the InvestorBrandNetwork.
