By Olesya Astakhova MOSCOW, April 17 - Ukrainian drone attacks in recent months are having a significant impact on the Russian nitrogen fertiliser industry, billionaire Andrei Melnichenko, founder of
Russian billionaire says drone attacks affect nitrogen fertiliser trade
Impact of Drone Attacks on Russian Fertiliser Industry
By Olesya Astakhova
Significance of Recent Drone Attacks
MOSCOW, April 17 - Drone attacks in recent months are having a significant impact on the Russian nitrogen fertiliser industry, billionaire Andrei Melnichenko, founder of fertiliser producer EuroChem, told reporters on Friday.
Global Fertiliser Trade and Food Security Concerns
Shortages and rising prices due to the blockade of the Strait of Hormuz, conduit for about a third of global fertiliser trade, are a major concern in terms of global food security.
Constraints on Russian Fertiliser Output
Russia accounts for about one-fifth of the global trade, but limited capacity, domestic export caps and recent Ukrainian attacks on major plants all constrain its ability to ramp up fertiliser output.
Details of Drone Attacks and Their Consequences
Statements from Andrei Melnichenko
"Well-known events occurring on our country's territory are leading to increased drone attacks on Russian (fertiliser) enterprises," Melnichenko told reporters on the sidelines of a conference in Moscow, adding that the impact was "significant enough".
Attack on Dorogobuzh Plant
A Ukrainian drone attack on Dorogobuzh, one of Russia's largest fertiliser plants, owned by major producer Acron, on February 25 killed seven people and has temporarily knocked out about 5% of the country's overall production capacity.
Production Capacity and Recovery
Dorogobuzh accounts for 11% of Russia's ammonium nitrate output and 9% of its NPK fertiliser production, a mixture of nitrogen, phosphorus and potassium. The plant is expected to be operational again in May.
EuroChem's New Production Plant
EuroChem is building a major new production plant with a capacity of 1.1 million tons of ammonia and 1.4 million tons of urea in the Leningrad region, which has been a frequent target of drone attacks in recent months.
Market Reactions and Trade Disruptions
Fertiliser Prices and Trade Routes
Melnichenko said that although prices for all three major types of fertilisers had risen, in his view the effective closure of the Strait of Hormuz has had no impact on the trade in potash, while disruption to phosphate trading was temporary as Middle East producers switch to ports outside the Gulf.
Adaptation to New Export Routes
This, he estimated, would happen more quickly than the six months Russian fertiliser producers needed to switch from European to local ports after Western sanctions were imposed.
Production Challenges for Nitrogen Fertilisers
Melnichenko said that production of nitrogen fertilisers from natural gas had suffered the most.
Impacts on Global Producers
"The production of nitrogen fertilisers from gas in Qatar, in particular in Saudi Arabia, and so on is affected, because it is produced from deposits located in the conflict zone," he said.
Russian Export Policies
Russia, which controls up to 40% of the global trade in ammonium nitrate, said on March 21 that it would stop exports of the fertiliser for one month.
(Reporting by Olesya Astakhova; Writing by Gleb Bryanski; editing by Guy Faulconbridge, Kirsten Donovan)
