EU nitrogen fertilizer market explodes
From the beginning of the year, the European Union (EU) saw record high levels of nitrogen fertilizer
imports, primarily from Russia, Egypt and Algeria, by order of magnitude. There is more than meets the eye here, as EU trading partners for nitrogen fertilizers also include Nigeria, Trinidad and Tobago, Turkmenistan and Azerbaijan. All four of those countries are known for harboring some of the world’s largest natural gas reserves and production facilities, so it should not be a surprise that more natural gas production was used for fertilizers to meet the growing demand in the EU. Most importantly, Russia remains the top supplier of nitrogen fertilizers to the EU—despite sanctions and the war in Ukraine.
France decided to upper cut Algeria this month, even after the two countries were supposed to be
improving their relations. The events were related to France sentencing three Algerians over their
alleged role in the abduction of an Algerian dissident in France. Algeria responded in kind. All the French embassy officials were kicked out of Algiers. Of course, the timing of all this was crucial to fertilizer markets and prices. Since prices for nitrogen fertilizers kept going up from the beginning of the year, the EU had to keep a stable supply to tame prices. Algeria was the third largest supplier of EU nitrogen fertilizers after Russia and Egypt
Nigeria is likely to become another one of the top suppliers to the EU nitrogen fertilizer market in the near term. The famous Nigerian businessman Aliko Dangote has already announced the country’s interest to supply the global market with African-produced fertilizers. Moreover, the plan is to coordinate with Senegal to create a regional player in the fertilizer export market. Senegal contains phosphate rock and other processing facilities. To ease investors’ concerns, Dangote brought onboard Shell to ensure that the Dangote Fertiliser and Petrochemical plant would be a successful venture, with TotalEnergies in tow. Shell already committed to a final investment decision in early 2024.
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