Supply Chain Hit Again! Russia Suspends Ammonium Nitrate Exports for One Month
“Russia has suspended ammonium nitrate exports for one month to prioritize domestic supply for spring planting, intensifying global fertilizer market tensions. The move compounds existing supply chain disruptions from the Strait of Hormuz and domestic production setbacks, with analysts warning of sustained high fertilizer prices and potential ripple effects on global food security.”
Following disruptions to shipping through the Strait of Hormuz in mid-to-late March that triggered global shortages of energy and commodities, the international fertilizer market has suffered another major setback. On Tuesday (March 24), Russia, one of the world's key fertilizer suppliers, announced a one-month suspension of ammonium nitrate exports, further intensifying tensions in the global fertilizer market.
01 Export Suspension
Ammonium nitrate is a type of nitrogen fertilizer, and Russia holds a pivotal position in the global ammonium nitrate trade—controlling as much as 40% of the international market. According to a statement from Russia's Ministry of Agriculture, the export restrictions took effect on March 21 and are expected to remain in place until April 21.
The Russian Ministry of Agriculture has made it clear that it has ceased issuing all previously granted ammonium nitrate export licenses and will not issue new ones, with the exception of contracts under intergovernmental agreements. The ministry emphasized that, against the backdrop of growing global demand for nitrogen fertilizer exports, suspending foreign supplies will prioritize the needs of the domestic market during spring fieldwork, ensuring that local farmers have access to essential production materials.
In fact, Russia has maintained export restriction policies since 2021, requiring producers to prioritize domestic market demand over exports. The current suspension is a continuation and reinforcement of this approach.
02 Long-Term High Prices
Russia's decision to suspend ammonium nitrate exports is not an isolated incident but part of a cascading series of supply chain disruptions.
First, the Strait of Hormuz—a critical artery for global commodity shipments—handles 24% of the world's ammonia (a key raw material for ammonium nitrate). Following disruptions to shipping through the strait in mid-to-late March, global ammonia and fertilizer supply chains suffered severe shocks, already driving up fertilizer prices significantly. According to the Financial Times, the global benchmark urea price has surged 44% since the outbreak of the Iran conflict, surpassing $670 per ton.
Second, Russia's domestic nitrogen fertilizer production capacity has also been impacted by Ukrainian drone attacks. Dorogobuzh PJSC, one of the country's major nitrogen fertilizer producers, was hit by a fire following an attack in late February. The facility, which accounts for about 11% of Russia's ammonium nitrate production, is expected to remain offline until May for full restoration of operations.
Moreover, Russia's fertilizer industry currently lacks spare production capacity. Andrey Guryev, head of the Russian Fertilizer Producers Association, stated that production facilities are currently operating at near full capacity, making it difficult to significantly boost output in the short term to meet additional export demand.
03 Global Impact
Russia's suspension of ammonium nitrate exports will have far-reaching implications for several major agricultural nations.
Russia is a key fertilizer supplier to Brazil, a major agricultural producer, accounting for 25.9% of Brazil's total fertilizer imports. As a crucial global exporter of agricultural products, if Brazil cannot secure adequate fertilizer supplies, it could directly affect its production of crops such as soybeans and corn, potentially impacting global agricultural markets.
Beyond Brazil, Russia also exports ammonium nitrate to countries including India, Peru, Mongolia, Morocco, and Mozambique, and exported some fertilizer to the United States in 2024. Agricultural production in these countries could also be affected by the export suspension.
Meanwhile, Yara International, a Norwegian fertilizer producer, has suspended production at its Australian facility, further reducing global fertilizer supply. In a report, Jefferies analysts noted that fertilizer prices are likely to remain high over the long term due to damage to infrastructure in the Middle East.
04 Geopolitical Context
It is worth noting that against the backdrop of global supply chain volatility, Russia is leveraging its resource endowments to secure a favorable position in this crisis. According to a Financial Times report, with its vast resource reserves, Russia has not only avoided severe impacts from the turmoil in energy and agricultural markets but has also seen its export revenues somewhat mitigate the pressure of Western sanctions.
Russia's dominance in the global fertilizer market surpasses even its position in oil and gas, accounting for 23% of global ammonia exports and 14% of urea exports. Together with its ally Belarus, it controls 40% of the global potash market. Kirill Dmitriev, the Russian president's special representative for investment and economic cooperation, posted on X (formerly Twitter) on March 24, stating that Russia is "well-prepared for a foreseeable and arriving era of extreme scarcity."
At the same time, the rising food prices driven by global fertilizer shortages are prompting voices within the West to call for easing export restrictions on Russia. EU member states such as Hungary have urged the European Commission to consider relaxing restrictions on Russian fertilizers. Hungarian Minister of Agriculture István Nagy warned that limiting imports of affordable fertilizers could lead to lower crop yields and higher food prices.
05 Outlook
Analysts point out that even if Russia's fertilizer production increases this year, it will be difficult to fully compensate for supply disruptions from the Middle East. Chris Lawson, head of fertilizers at consultancy CRU, estimated that Russia's urea exports would reach about 9.5 million tonnes this year, accounting for 15% to 16% of global trade, while supplies from Gulf producers represent nearly one-third of total global trade.
Alexandra Prokopenko, a researcher at the Carnegie Russia Eurasia Center in Berlin, analyzed that in the medium term, the impact of the war on global agricultural markets could further tilt in Russia's favor. She noted, "If an official from an Asian or African country needs urea before the rainy season, he's not going to bring up Ukraine. He's just going to call the Kremlin. And the Kremlin will pick up the phone."
As the spring planting season begins in the Northern Hemisphere, tensions in the global fertilizer market are expected to persist. Agricultural authorities and farmers around the world will face the dual challenges of high fertilizer prices and supply uncertainty, which could further transmit pressure to global food prices, exacerbating food security risks.
