UN presses Kyiv and Moscow to agree fertiliser deal in Black Sea

Source:  Financial Times
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The United Nations is trying to broker a resumption of Russian ammonia exports through Ukraine, a Western diplomat said on Tuesday (Wednesday AEST), a move that could ease global fertiliser prices by allowing fertiliser shipments from Black Sea ports.

Ammonia is a key ingredient in nitrate fertilisers. A pipeline transporting ammonia from Russia’s Volga region to Ukraine’s Black Sea port of Odesa was shut down when Russia invaded Ukraine on February 24.

The pipeline from Russia to the Black Sea port of Odessa is designed to pump up to 2.5 million tonnes of ammonia per year. Getty

Facilitating Russia’s food and fertiliser exports is a central aspect of a package deal brokered by the UN and Turkey on July 22 that also restarted Ukraine’s Black Sea grain and fertiliser shipments. Russia has recently criticised the deal, complaining that its exports were still hindered.

The UN has proposed that ammonia gas owned by Russian fertiliser producer Uralchem be brought via pipeline to the Russia-Ukraine border. It would then be purchased by US-based commodities trader Trammo.

Trammo said it had been approached by the UN to assist in the project and was happy to co-operate.

“The absence from the market of ammonia formerly shipped through Ukraine has caused substantial hardship in countries dependent on that product,” Trammo CEO Ed Weiner said.

“We believe that resumption of shipments will help to stabilise fertiliser prices worldwide and to avoid a global food crisis.”

Uralchem did not immediately respond to a request for comment.

The pipeline is designed to pump up to 2.5 million tonnes of ammonia per year.

“The UN is pursuing all efforts to allow for a positive outcome on Russian ammonia exports to international markets,” said senior UN trade official Rebeca Grynspan, who leads the facilitation of Russian food and fertiliser exports.

She declined to comment on the specifics of the deal, nor if an agreement was close. Ms Grynspan said food and fertiliser was being exported from Russian ports.

Ukraine and Russia are major global grain and fertiliser exporters. The UN said the agreement on Russian and Ukrainian exports was needed to tackle a global food crisis that it said had been worsened by Russia’s war in Ukraine, pushing some 47 million people into “acute hunger”.

Russian President Vladimir Putin criticised the July deal last week, saying Ukraine was exporting food and fertiliser to the European Union and Turkey rather than to poorer countries. The pact allowing Ukraine’s exports is up for renewal in November.

An ammonia deal would give Russia more of a reason to stick to the Ukrainian Black Sea export deal. Russia and Ukraine declined to comment immediately on the discussions.

“By having a key Russian company export through the same Black Sea corridors that the Ukrainian grain is going through stabilises the arrangement and could lead to a longer-term extension of the agreement,” a Western diplomat said.

The UN has said that 30 per cent of the grain and other foodstuffs that had so far left Ukraine under the July pact had gone to low- and lower-middle-income countries.

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