Global fertilizer safety gains a shot in the arm - discuss Russia's ammonia regain export opportunities

Recently, Martin Griffiths, the United Nations Emergency Relief Coordinator, said at an event organized by Reuters that under the mediation of the United Nations and Turkey, as part of the Black Sea grain transportation agreement, Russia's agreement to resume ammonia exports from Togliatti through Odessa, Ukraine, through pipelines is "very close"
.
Griffith stressed that this is "almost more important than securing grain exports.
"
The reopening of the Russian pipeline to Ukraine has been closed since February 24, and the reopening of this pipeline will help ensure the safety
of global fertilizers.

Ammonia is an important fertilizer raw material
worldwide.
Before the Russian-Ukrainian conflict, Russia was the world's second largest exporter
of ammonia.
Data show that Russia exported ammonia worth $1.
02 billion in 2020, and the most important destination for Russian ammonia exports was Ukraine, worth $154 million, followed by Estonia, Morocco, Turkey and Belgium
.
After the escalation of the Russian-Ukrainian conflict, these export channels were almost completely cut off
.
For the global ammonia market, the world's second largest ammonia exporter has almost disappeared in the market, which will inevitably lead to a shortage of ammonia supply and an increase in prices
.
At the same time, ammonia is a downstream product of natural gas, and after Russian gas exports to Europe were blocked, European producers generally reduced synthetic ammonia production, resulting in more tight
ammonia supplies.
In the case of CF Industries in the United States, the company had an ammonia capacity of 16 million tons in 2020, while the company expects to produce less than 10 million tons
of ammonia this year due to high natural gas prices in Europe.
Ammonia is an upstream product of fertilizers, which in turn affect food production
.
Therefore, as Griffith puts it, ammonia is extremely important in global food security
.

In addition, ammonia is different from oil and gas, and its production has a certain technical threshold
.
At present, the Middle Eastern countries that are expected to replace Russia in the European oil and gas import market do not have enough ammonia production capacity
to replace Russian supplies.
As a result, countries in the Middle East and Africa desperate for fertilizer and food must rely on every source of ammonia imports, including Russia
.
The United Nations has said that the Russia-Ukraine conflict has exacerbated the global food crisis, which has pushed some 47 million people into "severe hunger", and it is hunger-stricken countries that demand export agreements
.
The agreement will give a shot in the arm
to alleviating the food problem in these hungry countries.
Of course, it takes time
to assess the final effect of the agreement.