The Finnish Foreign Ministry explained that the EU does not prevent the import of Russian mineral fertilizers to EU countries or in transit to other countries. The only exception is potash fertilizers. But the EU is required to freeze the assets and economic resources of individuals and entities under sanctions.
If we are talking about fertilizers that are exported to a third country, they can be freed from arrest, since they are necessary to ensure global food security.
“There is a certain conflict between the aid agreements for the supply of fertilizers and food, on the one hand, and the EU sanctions regime, on the other hand,” said analyst Aleksey Kalachev. at FG Finam.
The ship was checked, on the one hand, for the belonging of the cargo to a person under personal sanctions, and, on the other hand, for the destination of the cargo, which should be a third country. “That’s how European bureaucracy works – nothing personal, just the right boxes to tick must be in the appropriate paragraphs of the relevant forms,” he says.
The cargo of 20,000 tons, which was on board the detained vessel, does not appear to be significant in the total volume of Russian fertilizer exports and will not affect prices. The critical volume of 20,000 tons can only concern a small poor country, for which it could constitute a significant part of the necessary fertilizers. In 2021, while customs statistics were still publicly available, Russia exported around 37.5 million tonnes of miscellaneous fertilizers over the year, including 14.6 million tonnes of nitrogen, 11.9 million tonnes of potash and 11.2 million tonnes of mixed multi-component fertilizers. According to the Russian Association of Fertilizer Producers, in 2022 fertilizer exports decreased by 15%. According to Kalachev, this mainly concerns potassium chloride, the production of which in the Russian Federation in 2022, according to Rosstat, fell by a third.
The very fact of the arrest is significant – the ship was detained at the time there was a discussion about extending the grain deal. As a result, it was extended from March 19. But the Russian side agreed to an extension of only 60 days instead of the usual 120 days. Russia is ready to extend its action for more than two months, but only if a number of conditions are met, the main of which is to facilitate access of Russian foodstuffs to the world market. Despite all the agreements and assistance from the UN, the conditions for removing obstacles to the supply of Russian food and fertilizers have not been met, according to experts.
