Fertilizer market concerns grow as US sanctions on Russia sow confusion

Uncertainty over whether US sanctions on Russia will affect fertilizer products is disrupting the urea, urea ammonium nitrate (UAN), and ammonium nitrate (AN) markets, with participants seeking clarity on the treatment of Russian-origin material, sources told Platts Sept. 17.

The US House passed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 on Sept. 16, which authorizes tariffs of up to 500% on Russian goods. The bill is now awaiting President Trump's signature, but it remains unclear whether the duties would apply to fertilizers.

A US-based source said some urea offers were withdrawn by local producers Sept. 17 amid uncertainty over potential measures, affecting trading activity. "The market is lacking liquidity because of that," the participant said, despite describing an active demand in the US.

Russia was the leading urea supplier to the US market from January through July, providing 1,487,044 metric tons out of total urea imports of 4,200,517 metric tons, according to trade data compiled by S&P Global Trade Analytics Suite. Russian-origin urea accounted for about 35.4% of imports during the period.

Russia's shipments were more than double those from Qatar, the second-largest supplier, underscoring the market's exposure to potential disruption in Russian supply. Urea from Qatar totals 698,284 metric tons in Jan-July 2026, or about 16.6% of total imports.

Fertilizers, exempted?

The uncertainty has raised questions over whether any US measures would directly cover fertilizers. Despite the disruption, some traders believe fertilizers will ultimately be spared. "Given the current situation with agriculture, it appears to me that fertilizer will be exempt," one trader said.

Another trader echoed this sentiment, stating, "I think [fertilizers] should be safe."

However, a Russian producer highlighted the prevailing ambiguity, commenting, "Have no idea on that, to be honest. Let's see."

"For now, it looks like fertilizers will still be exempt as the bill imposes sanctions on Russia's defense and energy sectors as well as its shadow fleet of oil tankers," a Europe-based source said.

A Nigerian producer highlighted that the bill did not explicitly state that fertilizers were exempted, "so the uncertainty could create some upside pressure the next 30 days or so," he said.

The urea market had been increasingly active during September, driven by rising wheat and corn prices, which improved sentiment as the market replenished inventories before winter.

Meanwhile, import data through July showed a mixed picture for other Russian nitrogen products. Russia's fertilizer shipments to the US showed a surge in ammonium nitrate (AN), contrasting with a decline in urea ammonium nitrate (UAN) imports.

Imports of Russian AN more than tripled year over year to 198,817 mt, cementing its position as the top supplier with a 65.7% market share.

In the UAN market, however, shipments from Russia fell 12.9% on the year to 699,388 mt. Despite the drop, Russia remained the largest UAN supplier, holding a 49.9% share of US imports.

Trinidad & Tobago, the second-largest UAN supplier, increased its shipments by 9.4% to 430,743 mt, partially offsetting the lower Russian volumes and capturing a 30.8% market share.

Platts, part of S&P Global Energy, assessed the granular urea price in New Orleans at $474/st FOB on Sept. 17.