Friday’s Insider: EU tariffs reshape global fertilizer trade — but at what cost to European farmers?

In a move that was widely anticipated, the European Parliament has approved a sweeping package of tariffs on fertilizer imports from Russia and Belarus. The new measures, passed this week, aim to reduce the EU’s dependency on Eastern suppliers and incentivize domestic production and diversification of sourcing.

The Tariff Framework: A Gradual Squeeze

The tariffs will be phased in over four years, starting from relatively modest levels—€40 per metric tonne on nitrogen-based fertilizers and €45 per tonne on phosphates—and increasing sharply to €315 and €430 per tonne respectively by 2028. These measures are expected to significantly reduce the competitiveness of Russian and Belarusian fertilizers in the European market, which in 2023 together accounted for roughly 30% of the EU’s urea imports and 25% of phosphate-based imports, according to Eurostat.

Winners and Losers: Shifts in Global Trade Flows

With Russia and Belarus facing higher costs to access the European market, new opportunities have opened for other players.

Nigeria stands out as a key winner in the nitrogen space, especially in urea, where it currently faces only a 6.5% EU import duty. Talks are reportedly underway to lower or even suspend this duty. Nigeria’s urea production capacity, led by Dangote Fertilizer (with a 3 million tonne per year plant), positions it strongly to increase exports to Europe

Algeria and Egypt, already important urea and ammonia exporters to Europe, are likely to expand their market share. Algeria alone exported over 1.2 million tonnes of ammonia to the EU in 2023, a figure expected to grow.

In phosphates, North African countries—especially Morocco and Tunisia—alongside Saudi Arabia, are well-positioned to step in. OCP Group of Morocco already supplies around 50% of the EU’s phosphate imports and could benefit further from the shake-up.

Meanwhile, Yara, Europe’s largest nitrogen fertilizer producer, is seen as a direct beneficiary. With fewer cheap imports to compete against, domestic producers like Yara will likely gain pricing power, albeit at the expense of the downstream farming sector.

Ripple Effects Beyond Europe

Though Russian producers are squeezed in Europe, they are finding alternative markets. The United States still imposes 0% tariffs on Russian urea and UAN (urea ammonium nitrate), and in 2023 alone, imported nearly 1.5 million tonnes of nitrogen products from Russia despite the broader sanctions landscape.

Latin America, particularly Brazil, and parts of Africa (South and East) are also emerging as key destinations. India’s vast fertilizer demand—backed by government tenders—offers yet another safety valve. In FY 2023-24, India imported 8.7 million tonnes of urea, with Russia contributing over 25% of that volume.

What About the Farmers

While the EU aims to increase self-sufficiency and weaken geopolitical dependencies, the real cost will likely be borne by European farmers, many of whom are already grappling with elevated energy prices and tight margins. According to Copa-Cogeca, fertilizer costs in Europe rose by over 140% between 2021 and 2023, with no substantial relief in sight. These new tariffs may keep prices elevated or even push them higher, particularly in the absence of significant domestic production ramp-ups.

Subsidies may help cushion the impact, but ultimately, these costs are likely to be passed along the supply chain, raising the cost of food production across the bloc.

The Bigger Picture: Trade Diversification, Not Demand Reduction

It’s crucial to note that while the sources and routes of fertilizer trade are being redefined, global production and consumption volumes are expected to remain largely stable. According to the International Fertilizer Association (IFA), global urea consumption is forecasted to hover around 180 million tonnes in 2025, with total phosphate fertilizer usage expected at 48 million tonnes.

In short, fertilizers will continue to flow—but along very different paths.

The EU’s tariff strategy marks a significant geopolitical and economic pivot, with broad ramifications for global trade patterns. While some countries and corporations stand to gain, European farmers may find themselves footing the bill—quite literally—as the costs of food production climb. Whether policymakers will balance strategic autonomy with economic burden remains to be seen.

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About the Author of “Friday’s Insider”: Ilya Motorygin is the co-founder of GG-Trading and brings 30 years of experience to the fertilizer industry. Renowned for his comprehensive problem-solving skills, Ilya expertly manages deals from inception to completion, overseeing aspects such as financing, supply chains, and logistics.