According to RIA Novosti data, American companies spent $174 million in March 2024 on fertilizers imported from Russia. These purchases depict a 10% increase from those recorded in February. RIA Novosti is a Russian news agency owned by the Russian government.
According to the agency’s data, the proportion of fertilizers imported from Russia has grown to 17.1% from a year ago when the fraction stood at 9.7% of all fertilizers imported into the United States. The current figures show that Russia is now second to Canada, which is the leading exporter of fertilizers to America.
Potash fertilizers sourced from Russia saw a 29% year-on-year surge in March, accounting for $95.5 million of the total value of exports to America in March. Fertilizers containing nitrogen were worth $75.3 million while phosphorous fertilizers worth $3.1 million were imported by America in March.
It should be noted that this surge in fertilizer imports from Russia comes at a time when the U.S. has been spearheading efforts to enforce sanctions on various exports from Russia after the country invaded Ukraine.
With crippling restrictions in place, grain and fertilizers from Russia have still managed to be traded around the world. It is possible that even more of these products could have found their way onto different markets around the world but constraints related to insurance, shipping and payment processing as a result of the sanctions may have hampered other transactions.
Tony Will, CEO of U.S.-based fertilizer maker CF Industries, pointed out the irony of the vocal rhetoric about starving the Russian war machine of the funds it needs while at the same time continuing to import fertilizers from that country. He added that this practice of buying urea-based fertilizers directly supports the natural gas trade in Russia because those fertilizers have natural gas as a major ingredient.
This data brings to light how complex international trade can be and how challenging the task of enforcing sanctions can get at this time when economic activity is globalized. The Russian fertilizer exports to America are an example illustrating how economic interests often contradict what policy and rhetoric would want the world to believe.
It should be remembered that at the beginning of the Ukraine invasion that the European Union excluded natural gas from the Russian energy products covered by sanctions. This was because Russian natural gas was pivotal in the energy mix of many EU nations. That is an additional indication that economic needs can often impact foreign-policy decisions.
It is now up to manufacturers such as Compass Minerals International Inc. (NYSE: CMP) to study the opportunities presented by the sanctions on Russia and identify how they can strategically step up their production in order to avail the fertilizers that are still coming from Russia.
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