Further clarification has become available on Russia’s new duty on exports of most fertilizer products from Sept.1 until the end of 2024. As reported in last week’s Green Markets, the new ad valorem rate is 7% of the customs value (GM Sept. 1, p. 26).
However, the minimum duty per tonne in rubles will differ depending on the type of fertilizer, according to an Interfax report, citing the resolution that was signed by Russia’s Prime Minister Mikhail Mishustin on Aug. 30 and posted on the Russian government’s official website on Aug. 31.
Specifically, the duty in force will be 7% but will not be less than RUB1,100/mt (approximately $11.47/mt at current exchange rates) for nitrogen fertilizers, RUB1,800/mt ($18.77/mt) for potash, and RUB2,100/mt ($21.9/mt) for phosphate and compound fertilizers.
Water soluble phosphoric fertilizers with high production costs, such as diammonium hydrogen phosphate and ammonium dihydrogen phosphate, are exempt from the duties. This exemption was proposed to the Industry and Trade Ministry by the largest Russian producer of such fertilizers, Almaz Fertilizers LLC, according to an Interfax report, citing an unnamed industry source.
Since Jan. 1, 2023, until the new duty was implemented, the export duty on fertilizer products was zero if the customs value did not exceed the equivalent of $450/mt FOB. If the price exceeded this threshold, a duty of 23.5% was applied to the difference between $450/mt and the customs value.
The earlier export duty was aimed at collecting windfall profits amid a high global market price environment. But as global prices fell, the duty generated only around RUB6 billion in revenue in the first half of 2023, according to the report. Russia’s Finance Ministry initially had expected to collect RUB19 billion for the year.