A 20,000-metric ton donation of fertilizer by a Russian company to the government of Malawi is slowly making its way to the landlocked country from the busy port of Beira, Mozambique, in southeast Africa. The World Food Program told PassBlue that the offloading started on Jan. 23 and the goods should begin to be trucked to neighboring Malawi this weekend. The donation was shipped from a Dutch port at the end of November, and during part of that time, the vessel waited in a long line to berth at Beira. The final transport will involve 700 trucks driving two to three weeks to arrive in Malawi, a spokesperson for the UN agency said.
Once the fertilizer gets to its destination, the distribution to farmers is expected to start in the south, the region most devastated by cyclones and flooding in 2022. Cropping season in the country ends in March, raising questions as to how much of the product will be used.
The World Food Program said it was helping the Russian firm Uralchem-Uralkali to donate to developing countries a total of 260,000 metric tons of fertilizer, which have been stuck in various European ports and warehouses for months. The agency would not say which countries it would be chartering vessels to next, noting that decisions among UN agencies with Uralchem are continuing. Four months after an agreement was signed between the UN and Russia in Istanbul, the UN announced on Nov. 29 that the first shipment of 20,000 metric tons of fertilizer had left Terneuzen, Netherlands, for Malawi by the MV Greenwich, a British-flagged vessel. The shipping costs were covered by Uralchem and the trucking to Malawi is being paid by that government.
The deal is part of the Black Sea Grain initiative, which was signed by the UN, Türkiye, Ukraine and Russia in July 2022. The goal of the smaller pact is to export Russian foodstuffs to global markets to help lower food prices amid Russia’s war on its neighbor and related supply-chain disruptions.
The Black Sea agreement is renewable every four months, and the next expiration is in March. The three-year side deal was explicitly written to enable Russian fertilizers — including ammonia — get to markets by legally working through the sanctions slapped on Russia by the United States, Europeans and others. Another aim was to help the world achieve the “zero hunger” ambition in the Sustainable Development Goals, the UN said originally.
Although the range of sanctions on Russia exempt agricultural products, international banks and insurance and shipping companies remain leery of working with Russia as it devastates Ukraine. Rebeca Grynspan, the UN’s top trade expert, is tasked with easing the barriers hindering the outflow of Russian goods stuck in European ports and Russia itself.
“It will be the first of a series of shipments of fertilizer destined for a number of other countries on the African continent in the coming months,” Stéphane Dujarric, the UN spokesperson, said on Nov. 29, regarding the donation to Malawi.
Meanwhile, Russians are casting doubt on the UN-Russian side deal, as they did when the Black Sea grain pact was up for renewal in November, blaming sanctions for delays and other problems. Russia’s ambassador to Türkiye, Alexey Erkhov, was quoted last week in Tass, the Russian media site, saying, “There is no point in talking about UN-sponsored Russian agricultural and fertilizer exports to African nations.” He cited the first batch of Russian fertilizers to Africa from the Netherlands as an example.
“We cannot even imagine how long it would take to unblock the remaining 242,000 tons of produce,” he is quoted. “If implementing this entirely humanitarian endeavor is met with such dilemmas and hurdles, then it would be impossible to talk about normalizing the exports of our agricultural products and fertilizers with the assistance of the UN.”
He also tweeted, on Jan. 26, according to a Google translation: “Ammonia exports should have started under the Black Sea Initiative. Technical possibilities exist for the pipeline to be put back into operation. The only thing missing is Kiev’s consent. This hampers the supply of raw materials for fertilizers, sufficient to feed 200 million people.”
Erkhov was presumably referring to the Uralchem-owned pipeline that runs from Samara in Russia through Ukraine to the Black Sea port of Odesa, although the pipeline has not been operating since the war began on Feb. 24. For the last six months, the UN has been negotiating a plan in which a New York City-based company, Trammo, would buy the ammonia at the border of Russia and Ukraine to transport it through the rest of the pipeline to Odesa. The deal has been wallowing, as it requires the respective presidents of Ukraine and Russia to sign the arrangement. Dmitry Mazepin, a crony of President Putin, is sanctioned by Europe and the founder of Uralchem.
Erkhov’s remarks were echoed by Deputy Foreign Affairs Minister Sergey Vershinin of Russia when he met with Grynspan and her team in Moscow. According to a statement from the ministry, because of “financial, transport and logistics chains violated as a result of sanctions, prohibitive insurance rates last year, several million tons of Russian fertilizers and food were not supplied to world markets, which became one of the reasons for maintaining inflated prices for them, primarily for ammonia.”
Most wet-season planting cycles in Africa end in May. As of 2019, only six percent of cultivation done in the continent was irrigated. It could take months for the donated fertilizer to actually reach the farmers who need it. The World Food Program told PassBlue that discussions are also underway for the agency to hire other charters to ship fertilizers stored in Estonia, Latvia and Belgium, where the Russian goods have also been lingering for months. Since all the cargo belongs to Uralchem, the UN said it did not decide which country should receive the goods.
Farmers in Africa may receive any of them too late for use. Thanks to the market distortions caused by Putin’s invasion of Ukraine and the uncoordinated unilateral sanctions lobbed at Russia as well as Belarus, the economies of many African countries are experiencing free-fall. Most of them depend on single commodities for revenue.
For Malawi, it is tobacco. Although the share of Malawian farmers planting tobacco has dropped, the crop remains the main cash source for the agriculture industry. Tobacco prices sold by farms in 2022 were lower than the prices of maize and fertilizers, reducing the amount of cash entering the purse of farmers.
In 2020, Malawi exported $937 million worth of commodities and imported $2.53 billion. Nearly 19 percent of exports came from tobacco.
With the crop having less value than fertilizers in 2022, the country’s foreign exchange reserves shrank. Between December 2021 and November 2022, they dwindled 21 percent, from $429 million to $339 million. The government responded by devaluing its currency, the kwacha. Malawi has also seen inflation worsen. In 2021, the annual rate was 9.3 percent. It rose to 21 percent last year.
The tapestry of negative indices means that the government cannot afford to provide subsidized fertilizer to needy farmers under its Agricultural Inputs Program.
“This is the first time the Malawian government is having to depend on fertilizer donations,” Sheila Komen Keino, Malawi’s country director for the African Fertilizer and Agribusiness Partnership (Afap), told PassBlue. “The devaluation of the currency, shortage of forex and the distortion of the fertilizer market has made it impossible for the Malawian government to afford private sector fertilizer or purchase fertilizer itself.”
At a UN Security Council briefing on May 19, 2022, Antony Blinken, the American secretary of state, accused Russia of restricting fertilizer access and weaponizing food. Although Russia is reported to have limited its fertilizer export quota, Brazil and India have had access to imports from the country, albeit at a premium.
In June, Ambassador Ronaldo Costa, Brazil’s permanent representative to the UN, said that rerouting payments for fertilizer from Russia and Belarus is making the goods more expensive. For Belarusian potash — a fertilizer ingredient — to reach the market, Fitch Ratings, the commodities expert, says it circuitously passes by rail through Russia, China, Türkiye and “possibly” Iran, where it is re-exported.
While Russia and Belarus, close allies, have been seeking buyers for their fertilizers, shippers and underwriters in Europe have been unwilling to move the goods by sea.
“There’s this extreme caution due to sanctions,” Neil Roberts of Lloyd’s Market Association told NPR in September 2022. “So the US has its own list, and the EU has one, the UK has one. If you’re an international insurer, you are subject to all the regimes.”
It is the thousands of tons of fertilizer that international shippers were unwilling to touch that created the slush being donated by Uralchem and potentially used to win over some African nations. In line with the side deal between Russia and the UN signed in July 2022, we asked the World Food Program if the hesitation and confusion around the shipment of Russian fertilizer has been ironed out.
“This is beyond the scope of WFP to answer,” a World Food Program expert said in an email. “But it is vital that fertilizer, which is not subject to sanctions, must reach international markets to make sure there will be sufficient food production globally next year.”
So it may be up to the European Union and G-7 countries, who control a large volume of marine insurance trade, to ensure that fertilizer from Russia or Belarus is treated like any other commodity, and the UN Security Council may need to enforce it.
Dulcie Leimbach contributed reporting to this article.
The article was updated to reflect all the signatories to the Ukraine Grain Deal Initiative; that the smaller UN-Russian pact was focused only on Russian foodstuffs and that the final quote from a World Food Program was adjusted to clarify exactly what was said.
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Damilola Banjo is a staff reporter for PassBlue. She has a master’s of science degree from the Columbia University Graduate School of Journalism and a B.A. in communications and language arts from the University of Ibadan, Nigeria. She has worked as a producer for NPR’s WAFE station in Charlotte, N.C.; for the BBC as an investigative journalist; and as a staff investigative reporter for Sahara Reporters Media.