Russia, a major fertilizer exporter, lacks the capacity to boost production this year amid a global supply crunch caused by the closure of the Strait of Hormuz, through which 24 per cent of global trade in ammonia, an ingredient of ammonium nitrate, passes.

WHY IT MATTERS: Russia controls up to 40 per cent of the global trade in ammonium nitrate. While Canada’s imports of Russian nitrogen fertilizer halted due to economic sanctions, at least one agriculture group has argued the federal government should lift tariffs in order to ease strain on Canadian farmers.

The Agriculture Ministry said it had stopped all issued licenses for ammonium nitrate exports and will not issue new ones, with the exception of those pertaining to government contracts. Russia produces a quarter of the world’s ammonium nitrate.

“In the context of growing export demand for nitrogen fertilizers, the suspension of their supply abroad will allow the needs of the domestic market to be prioritized during the spring fieldwork season,” the ministry said.

Start of planting season

Ammonium nitrate is extensively used in agriculture at the start of the planting season. Russia has had export caps in place since 2021, while producers have been asked by the government to prioritize supplies to the domestic market over exports.

Russia exports ammonium nitrate to Brazil, India, Peru, Mongolia, Morocco, and Mozambique. It also exported a small quantity of ammonium nitrate to the U.S. in 2024.

Eurochem, Acron and Uralchem are Russia’s leading producers of ammonium nitrate.

Ukrainian drones in February hit the Dorogobuzh plant in Western Russia, Acron’s leading production asset, which makes about 11 per cent of Russia’s ammonium nitrate. The plant is not expected to be fully operational before May.

Ammonium nitrate is also used in the production of explosives.

— Reporting by Gleb Bryanski, Olga Popova and Anastasia Lyrchikova

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The war has shut down fertilizer plants in the Middle East and severely disrupted shipping routes via the Strait of Hormuz; conduit for about a third of global trade in fertilizers.

Russia accounts for about one-fifth of global fertilizer trade, but limited capacity, domestic export caps and recent Ukrainian attacks on major plants all constrain its ability to ramp up output, the sources said.

Domestic supply obligations

New export-oriented plants are not expected to come on stream before 2027, according to one source who spoke on condition of anonymity.

“Higher prices look great on paper, but Russian producers are boxed in by domestic supply obligations, especially ahead of the planting season,” said another industry source, who also spoke on condition of anonymity.

“And any windfall profits are likely to draw government attention as it looks for ways to boost budget revenues.”

A third source, also speaking on condition of anonymity, said companies are currently focused on meeting domestic demand.

“It may be possible to cover, over a short horizon, the demand left unmet without the Middle East, but in the long term it’s too large a volume to replace,” the source added.

A Ukrainian drone attack on Dorogobuzh, one of Russia’s largest fertilizer plants, owned by major producer Acron, on Feb. 25, has temporarily knocked out about five per cent of the country’s overall production capacity and killed seven people.

Dorogobuzh accounts for 11 per cent of Russia’s ammonium nitrate output and nine per cent of its NPK fertilizer production, a mixture of nitrogen, phosphorus and potassium.

One quarter of global trade by 2030

Russia, also the world’s top wheat exporter, introduced fertilizer export restrictions in 2021 to ensure sufficient supply on the domestic market.

Andrey Guryev, head of the industry lobby, estimated the gap between lower domestic and higher export prices at about 15 per cent during a meeting with Russian President Vladimir Putin in 2025.

He also told Putin that Russia is aiming to capture one-quarter of global fertilizer trade by 2030.

Russian fertilizer producers have been spared most Ukraine-related Western sanctions in order to ensure global food security, but face payment and logistical difficulties related to sanctions.

Brazil, India and China are the biggest buyers of Russian fertilizers, and it also exports to the U.S.

Shares in two of Russia’s publicly traded producers, Acron and PhosAgro, have risen modestly, by three per cent and four per cent, respectively, on the Moscow Exchange since the U.S. and Israeli attacks on Iran began on Feb. 28.

“A shortage of phosphate fertilizers, amid China’s export restrictions, the shutdown of sulphur production in Qatar, and tensions in the Strait of Hormuz, is a powerful driver for price increases in the market,” T-Bank analysts said in a research note.

“Against this backdrop, PhosAgro, as one of the key global suppliers, could strengthen significantly.”

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She said that Russia was already discussing with Egypt, its main wheat customer, how to use Russian seeds and technologies to increase production there and help it to strengthen the country’s food security.

“We understand that such a task will sooner or later be faced by any country in our world. Therefore, it is no longer enough to limit ourselves to simple trade in grain or oil and fat products,” Lut told the World Grain and Pulses Forum in Dubai.

Lut said that Russia, which historically used seeds mainly imported from Europe, had managed to raise self-sufficiency in seeds to 70 per cent last year from 60 per cent in 2022, and supplied domestically selected seeds to 35 countries by 2025.

“We envision the continuation of our cooperation in the development of joint technologies,” she said.

Russia is currently supplying 78 per cent of its wheat to traditional customers in the Middle East and Africa, mostly through the terminals located on the Black Sea, Lut said.

Russia aims to raise exports by 50 per cent

“The overwhelming majority of countries strive to ensure their own food security not only through controlled food supplies but also through their own production,” Lut said, stressing that Russia was ready to support this drive.

“To be under the illusion or in the paradigm that Russia will always supply grain or bulk vegetable oil groups to the markets of our partner countries is truly a misconception.”

Russia nonetheless aims to raise agricultural exports by 50 per cent by 2030, and Lut said that the country still wanted to boost its grain exports to 80 million metric tons by the same deadline, up from 53 million tons in the 2024/25 marketing season.

The official grain export forecast for the current marketing season is 50 million tons.

She said that Russia would seek to eliminate middlemen in its global grain trade and sell to end-chain customers directly, while developing new grain terminals in the Baltic and railroad supplies to the Far East.

Lut said that trade through the Black Sea terminals, Russia’s main agricultural export gateway, has not decreased despite the war in Ukraine, which she described as the “current situation”.

Russia has also been increasing supplies through the Caspian Sea, which mainly go to Iran, another major buyer of Russian wheat, describing the Caspian as “also a difficult zone”.

The overall agricultural trade shipping capacity should grow by 25 per cent to 100 million tons by 2030, Lut said.

— Writing by Gleb Bryanski in Moscow

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Ukraine is a major European producer and exporter of wheat.

Since the end of last year, Russia has sharply intensified its attacks on Ukrainian ports, with not only port terminals and warehouses coming under fire, but also civilian vessels.

UGA said that Ukraine had exported 292,000 metric tons of wheat in the first half of January versus 293,000 tons in the same period in December and against 610,000 tons in November 1-15.

The economy ministry said wheat exports totalled 8.2 million tons so far in the 2025/26 July-June season compared with 10.3 million tons in the same period in 2024/25.

Analysts and producers say that low demand for Ukrainian wheat due to global trends and competition from cheaper Russian wheat is one of the reasons for low shipments.

Analyst Barva Invest said on Telegram messenger that “insufficient interest from importers” limited the sales.

Corn export rates rise

But despite military risks, Ukraine maintains high corn export rates, with shipments increasing to 1.2 million tons in January 1-15 from 1.06 million tons in December 1-15 and 822,000 in the first half of November, UGA noted.

Barva Invest said that the corn market “remains one of the most liquid and shows significant activity on the part of both farmers and exporters”.

Ukraine exported 7.07 million tons of corn so far in 2025/26 against 11.15 million tons in 2024/25.

— Reporting by Pavel Polityuk

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Ukraine is a major global wheat grower and exporter, shipping about 70 per cent of its wheat harvest for export via the country’s Black Sea ports. Food exports account for the majority of Ukraine’s total exports.

Russia has increased attacks on the port hub in the southern Odesa region this month, leaving about a million households without power after one of the attacks.

UAC said in its weekly report that Ukraine had exported 359,150 metric tons of wheat by mid-December, out of 1 million tons contracted for export for the month.

The union said that some export terminals have halted operations and the port is operating at 20 per cent of capacity.

“We see that for the second week in a row, one of the central ports has been unable to start up and operate normally,” UAC said.

“Traders have no idea what to do. It’s dangerous to store grain at the port, and logistics are not working properly – there are constant power outages and constant disruptions with locomotives.”

Ukrainian state railway Ukrzaliznytsia said last week that Russia had attacked the port of Pivdennyi in Odesa region as well as the rail infrastructure that delivers cargo to the port.

Analyst Barva Invest said this month that Ukraine’s maritime export terminals had reduced grain intake owing to constant Russian attacks.

Ukraine’s economy ministry said last week that the country’s wheat exports had fallen to 7.5 million tons so far in the 2025/26 July-June season, against 9.2 million tons for the same period of the previous season.

The ministry also said that Ukraine would not restrict wheat exports in 2025/26 because of a large harvest and low export rates at the beginning of the season.

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After China allowed imports of Russian peas in 2022, many farmers had switched to peas from other crops, including wheat, whose profitability has fallen because of global oversupply that dented prices.

Now the issue is a surplus of peas, which for this year will be around 700,000 metric tons, according to an estimate by Reksoft consultancy.

WHY IT MATTERS: Russian farmers found it difficult to replace Canadian peas in the Chinese market despite making inroads.

“Everyone went for peas, expecting high profitability. They got low prices, low profitability. As a result, there’s an oversupply and no motivation for next year,” Reksoft’s head Dmitry Krasnov said.

Reksoft estimated the pea harvest for the season that runs from June last year to July 2025 at 5.3 million metric tons, up 40 per cent from the previous year. Overall exports are expected to fall to 2 million tons, down 15 per cent as compared with the previous year.

Russia exported 1.13 million tons of peas to China in the 2023/24 season, increasing its market share to 49.1 per cent at the expense of Canada and becoming the world’s leading pea exporter.

“Hopes that China’s market will soak up any supply did not materialize,” said Sergei Pluzhnikov, head of Russian Pulses Analytics. He predicted that farmers will turn to oilseeds in pursuit of better margins.

China uses peas to produce pea protein, which, like other plant-based proteins, is used as an ingredient in many dietary food products that are growing in popularity. The country exports most of its pea protein to markets worldwide.

China applied a 100 per cent tariff to Canadian pea imports among retaliatory measures against Canada’s levies on China-made electric vehicles and steel and aluminum products.

But Krasnov said it was difficult to replace Canadian peas, which meet the requirements of Chinese producers.

“Canada remains in the market, supplying peas. The issue is quality and stable long-term contracts between Canadian suppliers and China’s processing sector,” Krasnov said.

— Reporting by Gleb Bryanski

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Seaborne exports accounted for about 90 per cent of Russia’s total grain exports in the last season, which ran from July 1, 2024 to June 30, 2025.

Total seaborne exports have reached 13.1 million tons so far this season, 20.9 per cent down year-on-year, according to the data.

The fall partly reflects the slower pace of this year’s harvest.

Exports via Black Sea terminals, which normally account for around 90 per cent of all seaborne grain shipments, dropped by 9.8 per cent to 4.7 million tons in September 2025.

Deliveries via the Caspian Sea, mainly to Iran, increased by 47.2 per cent but the amount remained small, at 0.3 million tons.

Exports via Baltic Sea terminals, which supply Russian grain to “new markets” including in Africa and Latin America, fell by 73.3 per cent to 0.05 million tons in September 2025. Exports via Far East terminals were down by 27.9 per cent to 0.04 million tons.

— Reporting by Gleb Stolyarov

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Wheat exports in Russia, the world’s largest wheat exporter, fell by about 30 per cent year-on-year in August and by 10 per cent in September, according to data compiled by Sovecon consultancy, despite forecasts pointing to a good harvest this year.

“In 2025, there is generally an increase in export revenue across almost all sectors, except for grains. The situation here is not very good,” Patrushev told Putin at a televised meeting.

“We have been exporting fewer grains, but this is due to extremely low global prices for this product,” Patrushev said, stressing that demand for Russian grain among key customers continued to be high.

Benchmark global wheat futures Wv1 remain close to a five-year low set in August with the prospect of a record global crop in the 2025/26 marketing season contributing to the weakness in prices.

The slowdown in grain exports casts doubt on Putin’s plan to increase Russia’s agricultural exports by 50 per cent by 2030 and also signals emerging deeper problems in Russia’s farming sector, which has been booming in recent years.

The agriculture ministry called a meeting with the leading exporters at the start of September to discuss measures to boost exports, saying it wants to increase price formation transparency through development of exchange trade in grains.

Many farmers blame the wheat export duty, introduced in 2021 to protect the domestic market, as well as rising costs of fuel, fertilizers and machinery for the falling profitability of growing and exporting wheat.

Drought in southern parts of Russia, which have easy access to main export terminals on the Black Sea, contributed to the slowdown as export logistics for regions which had good harvest this year have become more difficult.

Egypt and Turkey are traditionally the main buyers of Russian wheat but the government is seeking to diversify exports to Asia in order to unlock the potential of new grain-producing regions in the Urals and Siberia.

— Reporting by Gleb Bryanski and Olga Popova

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“Stavropol’s grain harvest exceeded 8.5 million tons. So, this year we’ll definitely have enough bread,” Stavropol Governor Vladimir Vladimirov wrote on his Telegram channel. He said 85 per cent of the grain-sown area had been harvested.

Three Russian grain traders, who spoke on condition of anonymity, told Reuters that the first new-crop grain from Stavropol is actively entering the market.

Slow start for new crop exports

Russia’s export volumes fell to their lowest level since 2008 at the start of July due to a late start of the harvesting campaign, and some European traders told Reuters that slow sales of new crop wheat were disrupting the ship loadings at Russia’s Black Sea ports.

Stavropol, the region next to the Caucasus Mountains, is on track to become Russia’s top grain- and wheat-producing region this year after drought hit Rostov, the steppe region along the Don River.

Rostov Governor Yuri Slyusar told the TASS news agency that the grain harvest forecast in the region had been cut by 30 per cent to 8 million tons because of the drought, with about one-fifth of the seeded area there damaged.

In Krasnodar, another top-three grain-producing region, which borders Rostov in the north and Stavropol in the east, a better crop in the south is expected to compensate for losses from drought in the north.

“We expect that the regions where weather conditions were more favourable will help partially compensate for the losses through a high yield,” Governor Veniamin Kondratyev wrote on Telegram.

He estimated the collected grain crop at 8.5 million tons and said the harvesting campaign will be over this week.

Expected to remain top wheat exporter

The governors provided no data on what share of the collected grain was wheat, but in previous years the biggest share of the three regions’ seeded area was under wheat. Russia is expected to remain the world’s largest wheat exporter.

Dmitry Rylko, head of the IKAR consultancy, said the new-crop grain is coming mostly from southern regions, not central Russia, where the weather has been better and which is expected to compensate for crop losses in the south.

“Every day we see that the inflow of grain to the terminals is increasing,” Rylko said. He noted that, for the moment, there is a shortfall of new grain to cover fresh contracts but expects the gap to disappear within one or two weeks.

The Agriculture Ministry forecasts this year’s grain harvest at 135 million tons, including 90 million tons of wheat. This figure includes grain from Russian-controlled territories of Ukraine, which analysts do not include in their estimates.

As drought ravages Russia’s key agricultural regions, including Rostov, which supplied 12 per cent of Russian wheat in 2024, the official estimate is in doubt. President Vladimir Putin has said publicly that there are questions over this year’s harvest.

—Additional reporting by Mikhael Hogan in Hamburg

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“As we enter mid-year Northern Hemisphere harvest, a larger-than-expected crop is expected to limit the upside in global wheat prices,” Dennis Voznesenski, agricultural economist with the Commonwealth Bank of Australia, said in his recent Agri Commodity Weekly Alert.

The bank expects global wheat stocks to climb to 271 million tonnes at the end of 2025-26, from 264 million tonnes at the end of 2024-25.

The trade is now forecasting Russia’s production at 83 to 85 million tonnes, up from earlier estimates of 78 to 79 million tonnes.

“Favourable conditions may push EU wheat production to over 138 million tonnes, compared to 122 million tonnes last year,” he said.

The European Commission is forecasting that EU wheat yields will be nine percent above last year and six percent above the five-year average.

Canada’s spring wheat prospects are also vastly improved after large portions of the Prairies received much-needed rainfall. Analysts think the rains added millions of tonnes of grain production to the region.

Erica Olson, market development and research manager with the North Dakota Wheat Commission, said the growing season is progressing nicely south of the 49th parallel as well.

“Here in the U.S., we see generally a promising crop,” she said.

“But there are dry conditions out west.”

She agrees with Voznesenski’s assessment that the world should be well supplied with wheat.

“What we’ve been hearing is really no major concerns or alarm bells in any of the major wheat producing countries across the world,” said Olson.

“There’s really nothing on our radar to watch at the moment.”

Wheat demand was strong in 2024-25, especially for high protein, high quality wheat.

“I don’t expect that to disappear,” she said.

China was the one major exception, importing an estimated 20.68 million tonnes of wheat in 2024-25, less than half of the 48.11 million tonnes it bought the previous year.

However, the pendulum could be swinging back in that crucial market in 2025-26.

Retired U.S. Department of Agriculture economist Fred Gale noted in his Dim Sums blog that the Chinese government initially denied reports of poor crop conditions in that country.

However, Chinese agriculture minister Han Jun recently acknowledged that parts of Henan, the country’s largest wheat-producing province, had experienced sustained drought, although he insisted that efforts to ramp up irrigation reduced crop damage.

Gale noted in his blog that a report by futures market analysts reveals what the government seems reluctant to admit.

“They concluded that wheat yield this year declined between four to 15 per cent in most districts of Henan and Shandong, China’s two largest wheat-producing provinces,” he said.

Canada’s wheat farmers might be benefitting from China’s woes.

China was the top importer of Canadian wheat in April, buying 237,000 tonnes of the crop, according to the Wheat Market Outlook prepared for the Saskatchewan Wheat Development Commission by Mercantile Consulting Venture.

“After a very slow start, exports to China have risen to more normal monthly volumes,” stated Mercantile.

“However, total (August-April) exports to China are now 1.2 million tonnes, just 45 per cent of last year’s volume to date.”

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