Russia Extends and Tightens Fertilizer Export Quotas Through May 2023

Russia has extended its export quotas for select fertilizers — and reduced the levels of allowed shipments — in an ongoing initiative to secure supplies for its domestic market as farmers prepare for the upcoming crop cycle.

The quota policy renewal, announced this week, is effective from January through May and totals nearly 11.8 million tonnes, which will be split among exporters. Certain nitrogen exports will be capped at a combined 5.87 million tonnes, with complex nitrogen fertilizer products limited to 4.9 million tonnes. 

The latest quota limits on nitrogen are tighter than the parameters issued in May 2022, which expire at the end of December. The quotas apply to shipments outside the Eurasian Economic Union — which comprises Belarus, Armenia, Kazakhstan, Kyrgyzstan, and Russia.

Fertilizer futures and physical prices had a muted response this week to Russia’s updated export policy, with key futures contracts at the US Gulf coast and in Egypt continuing to fall, as shown in this Gro display. Global urea demand has retreated in the last couple of months and prices have been under pressure and continue to fall heading into the new year.

Russia is the world’s biggest exporter of fertilizers, with large volumes typically shipped to the US and Brazil. 

US imports of Russian urea between January and October 2022 fell by 42% from a year earlier, but have only dropped below historical levels in recent months. The US hasn’t placed sanctions on Russian nitrogen imports, but some consumers have opted for other origins following Russia’s invasion of Ukraine in February. 

View this Gro display which shows month-by-month imports of Russian fertilizers by the US and Brazil, as well as Russian production and export data.

For Brazil, imports from Russia of a range of fertilizer products have reached record levels in many months beginning in mid-2021.

Russia’s move adds to the challenge of fertilizer affordability facing farmers worldwide. China also has restricted exports of fertilizers, and potash exports from Belarus, a major supplier, are limited due to US sanctions. Fertilizer supply availability, while adequate in North America and Europe, will be especially squeezed in countries where currency depreciation has fueled high inflation, including in Latin America and Africa. 

Global fertilizer prices, while down from their mid-2022 peaks, will remain historically elevated in 2023 and beyond, bloating farm production costs. In the US, fertilizer and other input expenses are projected to account for 49% of total operating costs for corn farmers in 2023, according to Gro’s US Farmer Profitability & Crop Budgets app. That’s on a par with 2022, but sharply above the average since 2015 of about 40%.