From the Russian journal Kommersant (Google translation)
Chemical companies, which have experienced export difficulties since the beginning of March due to the refusal of the largest container carriers to work with Russian cargo, received a recommendation from the government to suspend shipments abroad. The Ministry of Industry and Trade explained that this is due to the risks of logistical failures. At the same time, a decrease in shipments of fertilizers from Russia threatens the food security of many countries in the medium term.
The Ministry of Industry and Trade recommended that Russian chemical companies temporarily suspend the export of their products until the carriers resume regular work and provide guarantees for the full implementation of export deliveries of Russian fertilizers. The department noted that they take into account "the current situation with the work of foreign logistics operators and the risks associated with it." Chemical companies do not comment on the situation.
Sources of Kommersant in the market note that the recommendation of the Ministry of Industry and Trade is rather technical, since since the beginning of March it is still almost impossible to export fertilizers, in addition, there are risks of confiscation or non-payment of goods. We are talking about the fact that from March 1, three key sea carriers - shipping companies Maersk, Mediterranean Shipping Company (MSC) and CMA CGM - stopped accepting cargo from Russia and for Russia.
“Currently, a situation is emerging where, due to sabotage of deliveries by a number of foreign logistics companies, farmers in Europe and other countries cannot receive the contracted volumes of fertilizers,” the Ministry of Industry and Trade noted.
The cessation of exports from Russia creates obvious risks of crop failure and, as a result, food shortages for the countries of Western and Eastern Europe, Latin America, South and Southeast Asia in the medium term. It is either extremely difficult or even impossible to replace Russian fertilizers.
Russia is one of the three leaders in the supply of fertilizers to the world market, exporting about 70% of its chemical products. At the same time, a number of global producers either significantly reduced or completely stopped the operation of their plants by the end of 2021 due to a sharp increase in prices for raw materials - gas. This significantly reduced global supply and increased demand for Russian products.
....Ms. Sakhnova recalls that Russia is the world's largest exporter of urea, ammonia, ammonium nitrate, complex fertilizers, the third largest exporter of potassium and the fourth largest exporter of phosphate fertilizers. In her opinion, given the limitation of exports from Russia, we can expect a further at least two-fold increase in world prices, which will lead to a significant increase in food inflation in the world. In 2021, the food price index calculated by the FAO increased by almost a third, the expert reminds.
How does this work?
Germany has abandoned pacifism. The German chancellor announced this weekend that his country would raise defense spending to two percent of GDP, scuttle the Nord Stream II pipeline, invest in liquid natural-gas terminals, and export lethal armaments to Ukraine. Sweden and Switzerland have abandoned neutrality. Bern will join the West’s sanctions regime, denying Russia a financial haven and an avenue to launder money, and Sweden is sending thousands of anti-tank weapons to the Ukrainian front. Passive actors like Denmark and Belgium are dispatching weapons and even irregular fighters to the frontlines. Putin-friendly figures like Hungary’s Viktor Orban and Turkey’s Recep Erdoğan have fallen in line with the West. The European Union is finally acting on its ambitions to serve as a defense force by shipping fighter aircraft across the Ukrainian border. And non-aligned states including Sweden, Finland, and Kosovo are making noises about seeking NATO membership.
History did not end, war-loving Nordics will not settle in their huts but keep looking for a fight.
