MOSCOW, May 13, Natalya Dembinskaya. After Western sanctions, India has strengthened its role as a key buyer of Russian oil. The current volume of transactions is again at its maximum. However, exporters managed to occupy another critical segment — fertilizers. Delhi began increasing purchases from Moscow back in 2022, when demand in the West fell. However, the USA and Europe are again on the list of largest clients, which they are extremely unhappy with.
A third of the entire market
In April, India increased oil imports from Russia by 19% to 1.96 million barrels per day. This is the maximum for nine months, as calculated by the analytical agency Kpler. However, Moscow provided its BRICS partner with more than just black gold.
The share of fertilizer exports to India in the first two months of 2024 reached 34%, according to statistics from the Ministry of Industry and Trade. A year ago it was 23%.
This is 14% of all chemicals sent abroad. Only Brazil buys more. Also in the top five are China, the USA and Mexico.
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As Leonid Khazanov, an independent industrial expert, explains, this is due to general changes in the structure of imports. On the one hand, it has decreased overall; on the other, sales of fertilizers from competing countries have decreased. Thus, there was a repositioning of suppliers with the strengthening of Russia.
Retained leadership
Interestingly, in physical and monetary terms, fertilizer exports to India decreased — by 15% year-on-year (to 611.2 thousand tons) and to 231 million dollars. Nevertheless, Moscow retained its leadership. In second and third places are Saudi Arabia and Oman.
Here analysts point to several factors. Firstly, India formed significant reserves in the previous period — when Russia reoriented itself from the European direction to the Asian one.
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“Secondly, Delhi is pursuing a policy of restarting idle mineral fertilizer plants and building new ones. True, this only applies to nitrogen. In addition, domestic chemical companies, based on market conditions, have expanded sales to other countries besides India,” notes Khazanov.
Since the summer of 2022, Russian oil exports to India have grown 3.2 times in physical terms (up to 3.6 million tons per year) and 5.6 times in monetary terms (up to $2.7 billion). Supplies of urea and nitrogen completed the picture. So the West’s plan to deprive Moscow of income failed.
< h3 id="1944677557-3">Less discount
In 2022, fertilizers, like oil, were sold to Asia at large discounts. However, by the fall of 2023 the situation had changed. Trade with the US and Europe resumed, and discounts were sharply cut.
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"Due to a lack of demand in Europe, Russian prices were lower than those of Morocco and Jordan. Now the approach to India is different. Tariffs are getting closer to market prices,” noted The New Indian Express.
Reuters clarified: if previously discounts on diammonium phosphate (DAP) reached $80 per ton, then since last year they have not given even five dollars. Urea has risen in price from 300 to 400 dollars per ton.
Experts do not rule out that now Russian fertilizers are generally sold without discounts. And during the planting season, demand increases.
Alexey Rezvanov, editor-in-chief of the Fertilizer Daily portal, adds: in 2022, huge discounts had to be offered due to speculatively inflated prices and chaos in the market, when sanctions hit international logistics. Since then, trade has stabilized: goods have become cheaper, and discounts have become more reasonable. -ratio=»0.5625″ data-crop-width=»600″ data-crop-height=»338″ data-source-sid=»rian_photo» title=»Employee at the plant for the production of water-soluble and granular fertilizers» class=» lazyload» width=»1920″ height=»1080″ decoding=»async» />
Increased imports
According to the Food and Agriculture Organization (FAO), Russia is the world's largest exporter of nitrogen fertilizers and the leading exporter of potash and phosphorus fertilizers. It is not surprising that the West never decided to impose sanctions against these products. The US and EU continue purchasing. Americans are generally in the top three clients.
Exports overseas increased to 4.3 million tons (in 2022 it was 2.5, in 2021 — 3.8). In Europe, the former largest buyers of Russian gas have been particularly heavy on nitrogen fertilizers. According to a study by the Center for Price Indexes (CPI), their share in total EU imports increased last year to 24%. In monetary terms, this is 1.38 billion euros.
So, Germany purchased almost 550 thousand tons — twice as much as in 2022, and seven times as much as in 2021. France — 440 thousand tons, an increase of 25%.
The main reason is the high cost of gas, which is why its own production has become unprofitable.
«New gas»
Of course, the West is not happy with dependence on Russian fertilizers. As well as what the sanctions turned out to be. Soaring energy prices in Europe have caused great damage to energy-intensive industries, including chemicals. Against this background, Moscow’s economic successes are especially infuriating.
“Russia is now processing gas into urea, which is exempt from sanctions, and exporting it,” says the head of the Norwegian chemical giant Yara, Svein Tore Holseter, indignantly. According to him, this “distorts the European Union market.”
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"Fertilizers are the new gas. Russian urea imports reached record levels last season and now account for almost a third of the EU total. While commodity sanctions and price pressure are causing double damage to European industry, Moscow is increasing its influence in the market,” he is indignant.
He is echoed by the head of the American CF Industries, Tony Will. All Western efforts are aimed at depriving Russia of income. And yet, the United States buys both urea and urea ammonium nitrate from Moscow, which are essentially just natural gas processed into fertilizer, he laments. And he admits: “I’m just shocked.” All that remains is to sympathize with him.