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Russia-Ukraine Conflict will most likely Impact the Feed and Fertilizers Market Globally

Russia-Ukraine Conflict will most likely Impact the Feed and Fertilizers Market Globally

Russia-Ukraine Conflict will most likely Impact the Feed and Fertilizers Market Globally

  • 25-Mar-2022 4:34 PM
  • Journalist: Yage Kwon

The conflict in the eastern European region between Russia and Ukraine impacted Russia with the potential sanction responses from the western authorities that could further worsen the supplies of fertilizers on a global domain. There are worries that the global supplies of Phosphate based fertilizers such as MOP and DAP could worsen as the Chinese authorities suspended the exports till the end of the second quarter of 2022. Although, there was an ongoing rumour that the Chinese authorities may uplift the ban in the mid of the second quarter. Whereas, the consistent gyration in the international Crude Oil market indirectly uplifted the cost support from the key feedstock commodities used for the manufacturing of Phosphoric Acid.

Currently, the Chinese market observed a significant shift in the dynamics for the Phosphoric Acid market, amidst its utilization in the EV batteries raw material, which further coupled with the seasonal demand for the fertilizers in China. In addition, in the past couple of weeks the prices of several upstream shots up drastically with the support of the Crude Oil offers. Whereas, to fulfill the appetite of 3 Million tonnes of Fertilizers demand, the Indian authorities were consistently struggling to negotiate with the supplies of major Phosphate based fertilizers besides focusing on increasing the domestic production and seeking out alternatives for Phosphoric Acid. In February,  the Indian authorities hold talks with the Russian and Belarusian counterparts in regards to ensuring the supplies of DAP and MOP, although the talks were clouded with numerous uncertainty after the Russian invaded Ukraine. Currently, India ensured the deliveries of two cargoes of DAP from Saudi Arabia earlier this month. Market participants especially from the US, Europe, and Brazil were eagerly looking for the export availability of fertilizers showcasing blatant hypocrisy against the market sentiments.

As per ChemAnalyst, the Russian economy has been majorly impacted by the sanctions, although to support the duality sanctions had been tweaked including waivers from SWIFT sanctions to support the European countries to import Russian oil and gas. Whereas, several market experts suggested that the conflict will likely benefit the agricultural market such as India. As the food pricing index is hovering on a higher level and the supplies were likely to remain tight which ultimately levied its impact on the food, feed and grains market globally.

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