Fertilizer suppliers and retailers are scrambling to sort out the impact of the Canadian government’s sanctions on fertilizer from Russia and Belarus, including shipments that were paid for and loaded prior to Russia’s invasion of Ukraine.
Fertilizer has historically been one of Canada’s largest imports from Russia. Approximately 660 to 680 thousand tonnes of nitrogen fertilizer are imported from Russia into Eastern Canada in a typical year, representing a whopping 85-90 per cent of the total nitrogen fertilizer used in the region, according to Fertilizer Canada.
The fertilizer industry group says its members estimate around 200 thousand tonnes may be subject to the sanctions and tariffs that were announced by the Canadian government earlier this month.
Ships carrying nitrogen and phosphate fertilizers — mainly urea, urea-ammonium nitrate (UAN), and monoammonium phosphate (MAP) — from Russia or Belarus are either unable to unload in Canada, or facing steep tariffs upon arrival. There is also the possibility they are not allowed into Canadian waters.
In some cases, the fertilizer was ordered and loaded prior to the conflict escalating in Ukraine, but there is confusion around the wording of the sanctions announced in early March and how they are being applied.
“Right now, there are a lot of grey areas with the logistics of the Russian sanctions, and we are working with our government contacts to bring some clarity to them,” says Fertilizer Canada spokesperson Kayla FitzPatrick. “While it’s having a negative overall effect to the whole industry, Eastern Canada will be disproportionately affected since they depend on Russian fertilizer imports.”
“At this time, our members impacted by the sanctions are looking to source product to avoid issues of shipments being turned away or being subjected to the 35 per cent tariffs.”
As a result of the tariffs and needing to source fertilizer elsewhere, prices that were already at or near all-time highs are moving higher, with planting season right around the corner. Prices aside, there are questions about whether there will be adequate supplies for spring, especially in the latter part of the planting season as existing stocks are drawn down.
“Ontario grain farmers do typically rely on the fertilizer from Russia and Belarus,” says Grain Farmers of Ontario (GFO) chair and Essex County farmer Brendan Byrne. “The current sanctions and tariffs will impact supply and prices, however we recognize that the sanctions and tariffs are important tools to hold Russia accountable for its atrocious actions. In light of that, we are looking to the government to prioritize working with fertilizer manufacturers and retailers trying to bring these vital products to Canada.”
In addition to Fertilizer Canada and GFO, RealAgriculture has spoken with numerous retailers, mainly in Ontario, who are anxiously waiting to find out whether they will get fertilizer that they’ve ordered.
“We certainly have asked our growers to make sure they contact us, let us know their intentions, no matter how big or small, so that we can figure out whether we’re going to have enough inventory to cover them, or how we can work through that with potentially different sources of nitrogen, different sources of phosphate,” says Brad Walker of Belmont Farm Supply, in the interview below.
“There’s potential that there won’t be enough of some of these products, the major three nutrients, to go around,” says Walker.
While each region and retailer is in a different situation, he expects phosphate inventories will be the tightest of the macronutrients, with nitrogen products also in very short supply, while potash should be more available, coming from Western Canada.
Belmont Farm Supply, along with other retailers that are partnered with Solio Agriculture and AgroMart Group, are specifically asking Members of Parliament to exempt fertilizer shipments that were ordered prior to sanctions being implemented on March 2. “Those purchase decisions were made weeks, if not months, before the Special Economic Measures Act came into effect and the tariff will only negatively impact Canadian farms, not Russian companies,” says a letter sent to MPs this week.
The retailers are also asking the federal government to ensure ships with fertilizer originating in Russia and Belarus that was contracted prior to the sanctions taking effect be allowed to dock and unload in Canada.
Walker says he expects planting season will ramp up in the next two to four weeks in southwest Ontario, leaving little-to-no time to source phosphate and nitrogen elsewhere in an extremely tight market.
“For the early start, we’ll certainly have inventory in place and on the ground in terminals through the AgroMart Group network. We’re going to be able to get started,” he says. “It’s what we’re going to have to work for the last half of the planting season. That’s the stuff we need to get in place.”
Listen to Brad Walker of Belmont Farm Supply discuss the uncertainty around fertilizer supplies heading into planting with Kelvin Heppner:
Subscribe: Apple Podcasts | Google Podcasts | Spotify | RSS | All Podcasts
Please register to read and comment.