The US government is quietly encouraging agricultural and shipping companies to buy and carry more Russian fertilizer, according to people familiar with the efforts, as sanctions fears have led to a sharp drop in supplies, fueling spiraling global food costs.
The effort is part of complex and difficult negotiations underway involving the United Nations to boost deliveries of fertilizer, grain and other farm products from Russia and Ukraine that have been disrupted by President Vladimir Putin’s invasion of his southern neighbor.
The US has been quietly pushing companies to ramp up Russian fertilizer trade as a global food crisis looms, Bloomberg reports. This year, Russian fertilizer exports have fallen 24%, per the report. Meanwhile, Ukraine has over 25 million tons of grain, sunflower oil, and other goods stuck in the country.
According to Russia’s Grain Union, wheat exports doubled in May. At the same time, Bloomberg reports that over 25 million tons of grain, sunflower oil, and other goods are stuck in Ukraine due to security concerns.
While Western officials have called out the Kremlin for using food as a weapon in preventing Ukraine from exporting, Russia has said it hasn’t attacked any ports, instead pointing to shipping disruptions resulting from sanctions.
While Russia claims that sanctions fears are also holding back its grain exports, total shipments this season are down only 14%, and wheat exports doubled in May, according to the country’s Grain Union.
By contrast, more than 25 million tons of grain, sunflower oil and other commodities are stuck in Ukraine because of security fears in the Black Sea ports and shipping lanes traditionally used to carry them to global markets. Officials warn the situation will become more dire with the new harvest beginning.
Talks on releasing those shipments have gone slowly, with Putin seeking to pin the blame on Ukraine for not wanting to remove mines from ports placed to defend them from possible attacks by Russian forces.
Kyiv has said it’s not convinced by Moscow’s assurances that it won’t strike, noting that Russia also insisted before the war that it wouldn’t invade.
When Russia attacked Ukraine in February, the resultant sanctions had a major impact. Russia had been the world’s top exporter of urea, ammonium nitrate, ammonia and urea ammonium nitrate, and the No. 3 potash exporter globally.
The European Union shifted ammonia imports partly to the United States, further constraining domestic supply. Fertilizer jumped from 30% of the variable cost of crop production in 2020 and 2021 to about 45% in 2022.
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