Russia faces fertiliser shortages as domestic prices surge

Russia is grappling with a fertiliser shortage as domestic prices soar, driven by rising global demand and the recent abolition of export duties, according to farmers and industry representatives.

Farmers have reportedly appealed to Oksana Lut, head of the Russian Ministry of Agriculture, warning that they are unable to secure the materials needed for sowing. A letter published by Izvestia and signed by Oleg Sirota, head of the "People’s Farmer" Association of Agricultural Producers, said the average cost of fertilisers has surged by more than 30% since the start of the year.

“The price of fertilisers on the domestic market has risen sharply to record levels, and shortages have been observed for many products,” the letter said.

The issue was also discussed earlier this week at the All-Russian Farmers’ Congress in Kazan. Olga Bashmachnikova, vice-president of the Association of Peasant (Farmer) Farms and Agricultural Cooperatives of the Russian Federation (AKKOR), highlighted the scarcity of key products such as ammonium nitrate, noting that “there simply isn’t any.”

Farmers attribute the worsening situation to the government’s decision to lift export duties on fertiliser producers starting January 1, 2025. These tariffs, in place since September 2023, were designed to protect the domestic market from price spikes and maintain a balance between domestic consumption and exports.

Babken Ispiryan, deputy chairman of the "People’s Farmer" council, said the removal of export restrictions has pushed the domestic fertiliser market to a “critical point.” He warned that prioritising export contracts over domestic supply leaves Russian farms at a disadvantage, potentially disrupting the sowing season and forcing farmers to pay inflated prices.

Farmers are caught in a bind: government-imposed price caps on agricultural produce prevent them from passing rising fertiliser costs onto consumers, while reducing fertiliser use could threaten profitability and risk bankruptcy.

Industry associations have urged authorities to take action to stabilise prices, including considering restrictions on fertiliser exports, to avert a significant decline in agricultural output.

By Sabina Mammadli