How will Russian fertiliser quotas impact Australian growers?

A new quota on Russian fertiliser exports could make it even harder for Australian growers to access affordable supplies.

A quota on Russian fertiliser exports announced on Wednesday could make it even harder for Australian growers to access affordable supplies next season. Source: iStock / Getty Images

Australian grain industry bodies have called on growers to secure their fertiliser supplies for the coming season early after Russia placed quotas on its fertiliser exports on Wednesday.

The Russian government announced it will limit exports of nitrogen fertiliser exports for six months to stabilise supply for Russian growers ahead of spring grain sowing.

Grain Growers Ltd chair Brett Hosking said the news was “not unexpected” but was “a concern” for Australian growers already struggling with high fertiliser prices.

Mr Hosking advised growers to speak to their suppliers to make sure they can access the products they need for the 2022 – 2023 cropping season.

“With many agricultural consumables facing supply constraints over the next 6 – 12 months we encourage all growers to maintain good communication with suppliers,” he said.

Grain Growers chief executive Dave McKeon said the main concern about the reduction in supply from Russia was that it would “compound” the challenges growers were already facing due to fertiliser export restrictions out of China and global supply chain issues.

“This will make it even more difficult for Australian farmers to access fertiliser at a cost-effective rate coming into next year’s cropping season,” he said.

@TEMarkets have compiled data on Russian fertilizer exports and the contribution to the global fert trade https://t.co/e5Cb27Z2Pbpic.twitter.com/ipfgizXtPf

— GrainGrowers (@GrainGrowersLtd) November 3, 2021

Market analysis from grain market analysts TEM shows Russia exported more than 11 million tonnes of urea, ammonia, urea ammonium nitrate, ammonium nitrate and nitrogen phosphorus potassium fertiliser in the six months from November to April 2020.

The country produced almost 80 per cent of global ammonium nitrate fertilisers and nearly 60 per cent of global nitrogen phosphorus potassium fertiliser in 2020.

Russian prime minister Mikhail Mishustin announced the country will limit exports of nitrogen fertilisers to 5.9 million tonnes, and complex nitrogen-containing fertilisers to 5.35 million tonnes for the six months to April next year.

Mr Mishustin said in his announcement the government hoped the export limits would help contain food price increases in Russia. A surge in global gas prices have increased the cost of nitrogen fertilisers in Russia, which need gas for their production. The government is concerned that without intervention this could lead to further food price increases in the country.