MOSCOW, August 4, Nadezhda Sarapina.China is buying up Russian fertilizers — according to the customs service, deliveries have grown by 20% in six months and reached record levels. Moscow has become Beijing's main exporter, overtaking Belarus and Canada. The reason for this is in the article .
The roles have changed
June figures: plus 28% compared to the previous month and 35% compared to the same period last year. Since January, the Chinese have spent $764 million on fertilizers from Russia (an increase of 20%). The largest part — $662 million — was for potash (an increase of almost a quarter).
Complex fertilizers — one hundred million (an increase of five percent), nitrogen fertilizers — a million (practically from zero).
As a result, Russia came out on top, pushing aside the previous leader, Belarus (they saw a decline from 985 to 481 million). Canada is also in the top three, with 406 million (almost the same as a year ago).
«The decline in Minsk's share is explained by competition — production capacities are incomparable, the transport route is longer and more complicated, and the cost price may include transit through our territory. We have more options for logistics,» says Vitaly Mankevich, Chairman of the Russian-Asian Union of Industrialists and Entrepreneurs.
Associate Professor of the Department of Strategic and Innovative Development of the Financial University, PhD in Economics Mikhail Khachaturyan adds: the Chinese are trying to diversify supplies. And Belaruskali and Uralkali are practically monopolists on the world market.
Demand and production
Experts explain China's increased demand by its desire to ensure food security. «Despite the dominant position of rice, Beijing has been betting on expanding the cultivation of spring and winter grain crops in recent years,» Khachaturyan notes. Agricultural development and high yields are a priority, and this requires a lot of potash and nitrogen fertilizers.
«According to Chinese businessmen, Russian ones, especially potash ones, have a reputation for quality and at the same time affordable prices,» Mankevich clarifies.
The redistribution of European supplies and the increase in capacity played into the hands of Asian farmers. «The result for 2023 is about 60 million tons, nine percent more than in 2022,» the expert points out. This year, the Russian Association of Fertilizer Producers (RAPU) is counting on at least 64 million.
The pace is really picking up. In January-March — 7.1 million tons, plus 18.9% compared to the same period in 2023, Rosstat calculated. True, in June — minus 9.8% compared to May. But for the entire first half of the year — an increase of 14.2%.
«Supplies to the West are decreasing: in 2022 — by 25-30%, in 2023 — by another 15-20%. Thanks to free volumes, Russian producers have gained a foothold in the Chinese market, signed additional contracts and moved into first place,» Mankevich concludes.
Another way
Some experts believe that the Chinese can resell our fertilizers — as well as hydrocarbons. Mankevich emphasizes that export-import companies carefully monitor the situation on the domestic and foreign markets and try to extract maximum profit.
«So, last year Beijing managed to overtake Moscow in deliveries to India — they increased imports by 62%, to 5.44 million tons. However, how much Russian fertilizers were there is an open question,» he clarifies.
Khachaturyan doubts the advisability of speculating on this category of resources — Beijing already controls almost 30% of the global market. China produces the entire spectrum of mineral and organic additives, and much goes abroad. «It is more reasonable to talk about the impossibility of satisfying domestic needs in the context of the growth of national agriculture, even despite the state's attempts to limit exports,» he argues.
In any case, China is not the only buyer. Thus, Moscow has provided a third of India's needs this year, and the parties have signed long-term contracts. The Brazilian statistical service recorded an increase in imports from Russia in June to a maximum since March 2023 — $338 million.
In addition, seven percent of exports go to Turkey, five to Mexico, and four to Kazakhstan, Khachaturyan lists. And another ten to the United States, four to Germany and France. Despite any sanctions. Moreover, Eurostat reports that from January to May, deliveries increased by 70% year-on-year, to 1.9 million tons.
Thus, Moscow does not have problems with sales markets and can freely redistribute product flows.