Baltic grain surge clogs ports, delays urea exports

Baltic Sea port congestion, driven by surging grain transit flows, is disrupting urea export schedules, with loading delays ranging from a week to a month, according to multiple fertilizer suppliers and traders that S&P Global Energy contacted Oct. 7.

The bottlenecks are affecting virtually all fertilizer producers operating in the region, with market participants citing simultaneous constraints at both port terminals and on the rail networks feeding them — a combination that is tightening near-term urea availability ahead of expected demand from key importing regions, including Brazil.

"All fertilizer producers are affected," said a fertilizer trader. "It's both in port and rail."

The disruption comes as Russian grain exports have been redirected to the Baltic amid persistent strikes at Black Sea ports, limiting trade flow from there since early July. Russian grain exporters have turned to non-grain terminals, while competing demand for steel and fertilizer has pushed up Baltic freight rates.

"Railway logistics are not good," said a Russian wheat seller. "There are several weeks of delays."

Most Russian wheat sellers largely stayed out of the market, as rail and storage congestion constrained offers.

"Russian terminals are overcrowded, inland logistics and fobbing are complicated," said a second wheat seller.

A fertilizer producer said the situation varied across producers.

"The congestion is there," the producer said. "What I'm hearing is that it's a different situation for every producer and the delays are varying from one week to one month."

The grain displacement is driving the disruption, said a third fertilizer trader, adding, "14 million [metric tons] of grains are going from Black Sea toward the Baltic. Today, prices of logistics went up; the ability to work with fertilizers is in the hands of ports."

The fertilizer trader estimated current Handysize freight for a 30,000-mt cargo from St Petersburg or Ust-Luga to a major Brazilian port at about $60/metric ton.

Not all market participants reported equal exposure. A fourth trader said his company felt the congestion, but was not severely impacted.

"Fertilizers have priority," he said, attributing the relative insulation to access to multiple dedicated terminals.

Platts, part of S&P Global Energy, assessed granular urea at $415/mt FOB Baltic Sea and prilled urea at $360/mt FOB Baltic Sea Oct. 6, both unchanged from Oct. 5.

Platts assessed its wheat benchmark, the Milling Wheat Marker, at $204/mt out of Black Sea ports and at a $109/mt premium to the CIF East Mediterranean basis for the Egypt 12.5% market Oct. 6.