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Russia Bans Fertilizer Exports; Will Weigh on Brazil Corn Crop
Russia, the world’s biggest exporter of fertilizers, imposed a two-month ban on ammonium nitrate exports. The move threatens to reduce fertilizer supplies, especially to South America, which is at a critical point in its growing season.
Brazil is by far the top importer of ammonium nitrate from Russia. Brazil’s large second corn crop, or safrinha, will be planted in the next few weeks, following the country’s soybean harvest, and will require nitrogen fertilizer in many fields after the corn has emerged. Brazil is the world’s No. 2 corn exporter in most years.
The outlook for South America’s big corn and soybean crops has deteriorated, as a second consecutive year of drought in Argentina and southern Brazil, brought on by La Niña, drags down yields and production forecasts. Gro’s new Strategic Assessment, “2022: The Year South America Drives Global Agricultural Markets”, which is available for download, offers an in-depth look at the current South American season’s prospects.
Ammonium nitrate and urea are the two main sources of nitrogen fertilizer, the most used fertilizers in the world. Last week, the US International Trade Administration announced countervailing duties on urea nitrate imports from Russia and Trinidad and Tobago after an investigation found that the countries were selling urea nitrate in the US at less than fair value.
Russia’s new export ban on ammonium nitrate, which runs through April 1, is aimed at keeping more of its fertilizer supplies at home and controlling domestic prices. The move follows China’s ban on phosphate fertilizer exports that runs until June 2022.
Although the United States is not a direct buyer of Russian ammonium nitrate, Russia’s new export ban will likely result in higher fertilizer prices in the US. Since last year, urea cash prices are up nearly 90% in the US Midwest, and DAP futures prices are up nearly 30%.
US farmers will begin planting their spring crops soon. Higher fertilizer prices will impact production costs and could steer growers’ 2022 acreage decisions away from fertilizer-heavy corn crops.
Join Gro on Thursday, March 3, for our webinar “What Will Farmers Plant in 2022?” during which Gro’s research analysts will share our forecast of US planting intentions for the 2022 season. Gro’s US Planting Intentions Model allows users to project how much crop will be available in the coming year based on producers’ planting intentions for each of the major crops. Sign up here.
-Related Resources:
2022: The Year South America Drives Global Agricultural Markets
Brazil Sugar Production Headed for Another Drop
Russia Imposes Fertilizer Export Quotas to Control Inflation
