Russia suspended ammonium nitrate export licenses from March 21 through April 21 earlier this week, citing domestic planting season needs — a move that economist Steve Hanke says is a direct signal to the West: ease sanctions, or fertilizer won’t flow.
Russia’s Market Grip
Russia controls up to 40% of global trade in ammonium nitrate, making the freeze immediately consequential for world agricultural supply chains. Moscow’s stated rationale is prioritizing spring planting, but Hanke argued the timing and leverage are inseparable from the ongoing sanctions standoff.
In a post on X late Wednesday, Hanke also shared a list of the biggest ammonium nitrate importers, saying “sanctions will have to give or fertilizer won’t flow.”
Supply Already Strained
A global supply crunch driven by the closure of the Strait of Hormuz — through which 24% of global ammonia trade passes — has already tightened markets significantly.
A Ukrainian drone strike last month knocked out Acron’s Dorogobuzh plant in Smolensk, halting roughly 11% of Russia’s ammonium nitrate output until at least May. KuybyshevAzot, another major producer, has also faced repeated drone attacks.
Average fertilizer prices have risen 27% as of March 2026, with nitrogen fertilizers seeing the sharpest increases. Farmers across the U.S., Latin America, and Europe are facing rising input costs heading into critical planting windows.
The Sanctions At Play
Western sanctions formally exempt fertilizer, and the U.S. Treasury has explicitly stated that Russian fertilizer exports are not prohibited.
But the broader sanctions regime, imposed after Russia’s 2022 invasion of Ukraine, created severe practical barriers: Russian fertilizer producers face significant payment and logistical difficulties tied to exclusion from the SWIFT banking system and widespread insurer reluctance to cover shipments.
Image via Shutterstock
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