2024-07-04 22:24:36
With all the gas it has, Russia is almost unbeatable in the fertilizer market. Manufacturers who make them in Europe fear for their business and are sounding the alarm.
It is a posture that can continue for a long time. On one hand, the Russia which produces low-cost nitrogen fertilizers using its own gas reserves; on the other, European producers who dream of a tax on imported fertilizers which will allow them to raise their money.
At the heart of the problem is the price of gas, which is 70-80% of the operating costs of the fertilizer industry. At the height of the energy crisis in 2022, many factories stopped working. Ammonia production, for example, fell by 70% before rising again.
Europe addicted to Russian fertilizers?
To meet the demand in this difficult time, imports from abroad have increased dramatically, especially those from Russia. According to International Roomthe European fertilizer giant,” Russia’s urea imports to Europe reached a record level last season. At the beginning of the year, they represented almost a third of the total EU urea imports.. »
At this rate, Europe is moving directly to a new dependence on Russia. This is what he said Fertilizers Europe. The European pressure group says it is worried about food safety.
Balance of power
Germany’s largest ammonia producer, SKW Piesteritz, described a Europe flooded with Russian fertilizer in an interview with Money Times.
The worst-case scenario is the collapse of the European sector, experts warn. They are asking for help from politicians. The same policies that allowed Russian fertilizers to be imported to reduce the burden on European farmers: adding import taxes, this will raise prices even though they have fallen now and have returned to pre-war levels. , this is the case for urea in particular.
« It is difficult to see how manufacturers can get satisfaction quickly », sums up a fertilizer trader, who finds it difficult to see Europe giving up on the subject.
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