Market and product

Russia extended fertiliser export quotas until December as a global deficit deepens due to the Iran war and disruptions in the Strait of Hormuz, a key route for the seaborne trade in nutrients.

Russian producers are allowed to export 20 million tonnes of fertilisers for the period from June 1 to Nov 30, the government said in a statement Wednesday.

The effective closure of the strait has cut off about a third of the seaborne fertiliser trade, fuelling fears of a food crisis. Nations have raced to secure alternative supplies for farmers but top producers including China and Russia have capped exports, forcing buyers to pay premiums for limited volumes.

Russia, the world’s second-largest fertiliser producer, accounts for about 20% of the global trade. It’s already been prioritising domestic supply with the current export quota of 18.7 million tonnes running through the end of May. Russian farmers also enjoy reduced prices.

The new limits will cover 8.7 million tonnes for nitrogen fertilisers, more than 4.2 million tonnes for ammonium nitrate, and about seven million tonnes for complex fertilisers, according to the government.

The quotas won’t apply to fertiliser supplies to Georgia’s breakaway regions of Abkhazia and South Ossetia that are backed by Russia or to international transit shipments and deliveries provided as part of humanitarian aid abroad.

Nitrogen fertiliser prices are almost double what they were before the Iran war began in February. The longer Hormuz stays closed, the higher the risk that prices may climb further, pushing farmers to cut applications of nutrients.