Russia has banned the export of ammonium nitrate (AN) for two months between 2nd February and 1st April 2022, as the Russian government seeks to guarantee affordable supplies for domestic farmers following the spike in fertiliser prices. High prices forced Russian farmers to reconsider the use of nitrogen fertiliser, which prompted substitution away from nitrogen-heavy grains crops (such as maize and wheat) towards soybean production, as the latter requires comparatively less nitrogen fertiliser. Ammonium nitrate is one of two main sources of nitrogen fertilisers, with the other main source of nitrogen being derived from urea.
Russia accounts for around two-thirds of the world's annual AN production. In January 2022, the price of Russian AN rose by 260% year-on-year to reach USD 455/MT. The price increase is directly correlated with ammonia gas, one of the key input materials in AN production, and the price of ammonia gas has surged more than 500% since January 2021. Therefore, it is unclear whether the Russian ban will have an effect on Russian fertiliser prices, but prices movements during the first week of February has supported the Russian government’s decision. Both the Russian free-on-board prices of ammonia and AN unchanged seven days to 9th February, standing at 1,110 USD/MT and USD 455/MT, respectively.
