The United States has decided to ease sanctions on mineral fertilizer imports from Russia. According to the Kommersant newspaper, a new general license for fertilizer imports has been granted by the US Treasury Office of Foreign Assets Control.
Agricultural products, drugs and medicinal products, as well as mineral fertilizers, were included in the list of vital products. In addition, food products (excluding seafood and alcohol), vitamins and minerals, nutritional supplements and vitamins, bottled water, and live animals and feed were exempted from restrictions in the United States.
Now it is possible to carry out any business transaction with them, including re-export. At the same time, transactions with listed goods are prohibited if the Bank of Russia, the National Wealth Fund (NWF), the Ministry of Finance of Russia or any sanctioned bank are involved in any processing of transactions.
“The Treasury Department’s document is extraterritorial in nature, meaning all American allies are likely to follow it,” Kommersant’s sources said.
According to them, the decision to withdraw fertilizers from US sanctions may have been taken due to the fertilizer shortage in the world market caused by logistical problems. The three largest container carriers – MSC, Maersk and CMA CGM – stopped transporting goods from Russia as of March 1. As supplies continue to come from small companies, foreign fertilizer consumers fear shortages.
Representatives of the agrochemical market believe that the lifting of US sanctions will help return the usual logistics – the “whales” of container transport will transport essential goods and humanitarian cargo from the Russian Federation, they said.
Even taxes on Russian fertilizers could be waived, but anti-dumping measures are still in place in both the US and Europe.
In the United States, 6% of potassium, 20% of diammonium phosphate and 13% of carbide fertilizers are Russian. Europe depends on chemistry about 2-3 times stronger than the Russian Federation.
In general, on the backdrop of a possible reorientation of Russian producers to Asian markets, a change in commodity flows could lead to fertilizer shortages in Europe and America for several months.
The US Treasury license for Russian fertilizers shows that “legal structures are unstable” and that restrictive measures against Russia can be relaxed “in the most sensitive areas,” according to cross-border transport legal expert Maria Lyubimova.
In mid-March, Andrey Melnichenko, a Russian billionaire and former owner of EuroChem, one of the world’s leading producers of mineral fertilizers, warned that there would be a global food threat if the conflict dragged on and the humanitarian crisis in Ukraine continued. shortcomings
“One of the victims of this crisis will be agriculture and food. The conflict has already led to a sharp rise in fertilizer prices, which farmers can no longer afford,” Melnichenko said.
It also pointed to food supply chains already affected by the coronavirus pandemic, which could be further impacted by fertilizer shortages. According to him, this will lead to a further increase in food inflation in Europe and the emergence of food shortages in third world countries.
Earlier, the Ministry of Industry and Trade had recommended that Russian producers stop exporting fertilizers due to logistics problems. At the same time, the ministry explained that disruptions in fertilizer shipments could directly affect the national security of several countries and cause food shortages for hundreds of millions of people in the medium term.