EXCLUSIVE-Nigeria buys emergency Canadian potash to replace lost Russian supply
Nigeria had to buy emergency supplies of Canadian potash in April after the country was unable to import the key fertilizer from Russia due to the impact of Western sanctions, the chief of Nigeria’s sovereign investment authority, the NSIA. Uche Orji, the head of the NSIA, declined to comment on the prices. However, spot prices are now up more than 250% for deliveries to West Africa compared to last year, according to commodity pricing agency Argus Media, carrying a new blow to the country’s finances.
The move shows one of many unintended negative consequences of sanctions aimed at punishing Russia for its invasion of Ukraine, which it calls a “special military operation.” The International Monetary Fund said last week that the invasion had caused yet another “enormous negative shock” to sub-Saharan Africa, driving up food and energy prices and putting the most vulnerable people at risk of famine.
The added pressure comes as many countries are still reeling from the prolonged COVID-19 pandemic. Nigeria has been battling double-digit inflation for years, which accelerated to 15.92% last month, and its population of 200 million will face even higher food costs this year and the next year as the agricultural sector will pass on the higher costs of imported wheat, diesel and fertilizer.
“Russia was unable to deliver, so we bought spot from traders in Canada. The Canadian High Commission in Nigeria helped start the conversation with the producers,” Orji told Reuters. The NSIA negotiates imports of raw fertilizers such as potash as part of the Nigerian government’s program to develop its capacity to produce blended fertilizers.
Orji said Nigeria has enough potash stocks to cover 40% of blending demand and has purchased three shipments of Canadian potash, which are expected to arrive next month. Normally, the country takes five Russian shipments a year. Western sanctions and self-sanctioning by many global corporations and financial institutions have created chaos for anyone selling Russian-origin products and driven the prices of many energy products and raw materials to record highs.
Russia’s Uralkali, a major global crop nutrient producer, has been Nigeria’s sole supplier since 2019. Uralkali declined to comment. A spokesperson for the Canadian government said it “is aware of the difficulties encountered in accessing potash following the Russian invasion of Ukraine, and we are working closely with our Nigerian counterparts to explore solutions sustainable”.
The potash producer has so far not faced sanctions, but Russian businessman Dmitry Mazepin quit the board and cut his majority stake in Uralchem after being hit by European sanctions in March. Uralchem holds the majority of Uralkali. Orji said discussions were underway to see if a Russian delivery could still be made.
The price of potash has been on the rise since last year after the EU imposed sanctions on Belarus, the world’s third-largest producer after Russia and Canada. The price soared in early March following financial sanctions against Russia, hitting a record high of $1,125 a tonne in late April for product delivered to South Africa, according to commodity pricing agency Argus Media. Together, Belarus and Russia account for 38% of global potash supplies, which are now uncertain.
Nigeria imported about 200,000 tonnes of potash last year, one of three key ingredients for fertilizer blends, according to local fertilizer association FEPSAN. Imports of raw materials from Nigeria cover just under 40% of Nigeria’s needs, the rest is of national origin and local mixed production was 1.5 million tonnes last year, almost the equivalent of domestic consumption. “I hope Canadian potash will arrive just in time for the planting season, which starts as early as the end of May in some areas,” said FEPSAN Executive Director Gideon Negedu, adding that the association has a strategy to prioritize crops that need more. potash.
(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)