Russia says to consider setting up unified fertilizer trading company to boost pricing power

According to media reports citing sources, Russia is considering the establishment of a unified trading company to export fertilizers in an effort to increase its pricing influence on the global market.

Sources said the idea was proposed in July of this year by Dmitry Mazepin, the founder of Uralchem. Russian Prime Minister Mishustin and Minister of Industry and Trade Manturov subsequently discussed the matter, but no decisions have been made, and it's unclear when they will revisit the proposal.

UralChem is a leading fertilizer supplier in Russia, which is the world's largest fertilizer producer, accounting for about 15% of the global annual consumption.

The sources revealed that some major fertilizer manufacturers are not in favor of this idea, fearing it would harm their business. They believe that the export of most fertilizers has already returned to pre-war levels, so they see no benefit from this proposal.

By setting up a unified trading company, the Russian government can have greater control over fertilizer export revenues and exert greater influence on global pricing. Russian fertilizer companies currently trade goods through Switzerland and other third countries.

While the West has not directly sanctioned Russian fertilizer companies due to the importance of fertilizer to food production, Baltic ports have stopped processing most fertilizer products, leading to a decrease in shipments. In addition, global shipping companies, some international banks, and insurance companies have pulled out of Russia, making it harder for the country to export fertilizer abroad.

According to Russia's public statements, while Russian grain and fertilizer exports have not been fully sanctioned by the West, Western restrictions on payments, logistics, and the insurance industry are obstacles. Russia has repeatedly called on the West to remove these barriers and provide convenience, making it a condition for extending the Black Sea Grain Agreement.

In July of this year, Russia announced the suspension of the Black Sea Grain Agreement, stating that parts of the agreement concerning Russia had not been fulfilled.