As anticipated, Russia will introduce export duties on fertilizers – as well as on coal – next year.
For phosphate and nitrogen fertilizers, the baseline has been set at $500 per mt, and for potash at $400 per mt, according to an Interfax report on Oct. 3, citing Russia’s Finance Minister Anton Siluanov. The minister was speaking at preliminary hearings on the draft budget in the country’s Federation Council.
The issue of export duties on fertilizers has been under discussion for some time, having been triggered by the sharp rise in prices. However, Russian producers had managed to avoid the measure by freezing prices to domestic consumers.
Reports last month suggested the Finance Ministry was considering imposing the duty only for a six-month period. However, the proposed period for the duties to run is currently unclear.
Budget revenues from the planned export duties on fertilizers and coal in 2023 are estimated at RUB135.6 billion (approximately $2.26 billion at current exchange rates), according to an explanatory note to the draft budget for 2023-2025 submitted to the State Duma, cited by the report.
According to Russia’s Kommersant newspaper, citing unnamed sources, around RUB105 billion is expected to be collected from Russia’s fertilizer industry in 2023.
Analysts cited by Interfax estimate the export duties will amount to up to 10% of the Russian fertilizer industry’s EBITDA in 2022-2023.
They see the duties, together with falling phosphate fertilizer prices, continuing to have an adverse effect on the shares of Russian phosphate group PJSC PhosAgro.
Russian nitrogen and compound fertilizers have been subject to export quotas since Dec. 1 last year (GM Nov. 5, 2021), and were subsequently extended (GM June 3, p. 1; May 20, p. 31). The current quotas are set to remain in place until Dec. 31, 2022, but the Industry and Trade Ministry has not ruled out extending the quotas until May 2023 (GM June 10, p. 1).