Europe is suddenly becoming dependent on an important Russian product: “It is essential for food production”

Europe is heading towards the position where it will be dependent on Russian fertilizers, just as it was with natural gas, warns one of the largest European producers of fertilizers necessary for agricultural crops, informs the Financial Times, taken over by Agerpres.

Nitrogen-based fertilizers, which are important for plant growth, are produced on the basis of natural gas and Russia exported ever-increasing amounts to Europe, replacing some of its natural gas that is now banned in the EU, says Svein Tore Holsether, CEO of Yara International, one of the largest producers of nitrogen-based fertilizers.

“Fertilizers are the new gases. It is paradoxical that the objective is to reduce Europe’s dependence on Russia and now we are inadvertently entering a situation where we are transferring power to Russia over an essential product for food production,” says Holsether.

According to Eurostat, between June 2022 and June 2023, the EU imported twice as much urea, a commonly used fertilizer, from Russia than in the previous 12 months. In the current season, which will end in June 2024, imports from Russia are lower but still above the historical average and are responsible for a third of total urea imports in the EU bloc.

The price of fertilizers exploded after the Russian invasion of Ukraine, and the sanctions imposed on Russia limited the amount of natural gas available, the raw material from which nitrogen-based fertilizers are produced.

That is hurting European farmers financially, while farmers elsewhere, particularly in Africa, have simply stopped using fertiliser, reducing yields and exacerbating a global financial crisis.

Meanwhile, fertilizer prices have fallen further amid lower gas prices, but the European fertilizer industry is still facing problems as imports from Russia take up an ever-larger slice of the market, says Holsether.

According to him, Russian fertilizer producers benefit from lower energy costs, and in addition, they do not have to comply with as many constraints regarding environmental protection and therefore can emit more greenhouse gases.

Russia could use its dominant position in the fertilizer market for political purposes, just as Moscow did with energy supplies, warns Holsether.

“When you’re producing a product that’s so important in food production, that’s a powerful tool. And again, I think it would be naïve to think that at some point this won’t be used for political purposes,” said Yara International’s managing director.

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