The Arithmetic of Agro-Geopolitics: Russia hopes to offset the loss of traditional export markets by supplying agro-industrial products to the Global South

A dash of diversification

The loss of the premium European market and broad sanctions, combined with a sharp increase in competition in global oil and gas supplies due to the fundamentally changed role of the United States, have significantly weakened Russia’s position as a leading energy power and are forcing the government to seek ways to diversify foreign trade (→ Re:Russia: Low-Margin Successes). Agro-industrial exports are the Kremlin’s main focus in its strategy to mitigate its oil and gas vulnerability.

In the mid-2010s, annual revenues from the two main categories of agri-industrial exports, namely food and agricultural raw materials (groups 1–24 in the foreign trade classification) and fertilisers (group 31), averaged $17 billion and $8 billion respectively, according to Russian customs data. In 2018–2019, exports in the first cluster rose to $25 billion annually on average, while fertiliser exports increased by around 10% in physical terms, with revenues unchanged. However, in the 2020s both categories experienced a surge, including in physical export volumes. Over the past three years (2023–2025), exports in the first category have averaged $42 billion, while the second has generated around $16 billion, according to customs data and calculations by Re:Russia. Thus, their combined contribution to Russian exports has increased by approximately 2.3 times in nominal terms since the mid-2010s, while their share of total exports has risen from 6% to 13%. As a result, agri-industrial exports have moved into third place in Russia’s export structure, behind the oil and gas sector, with revenues of around $200 billion annually in export revenue, and metals, which have generated an average of $66 billion per year over the past three years.

Furthermore, thanks to steady growth in external demand, fertiliser production has remained one of the few sectors of Russian industry that has continued to grow steadily, even in 2025 when around 80% of sectors and sub-sectors were contracting or stagnating (→ Re:Russia: Man-Made Slowdown or Crisis in the Air). According to Rosstat, the production of pesticides and other agrochemical products increased by 15% in 2025 alone and by 34% since 2021. And according to data from the Russian Association of Fertiliser Producers (RAPU), in 2025, fertiliser production as a whole rose by nearly 12% compared with the pre-war level of 2021, from 58.6 million tonnes to 65.4 million tonnes, while export volumes increased by 20%, from 37.6 million tonnes to 45 million tonnes. Thus, exports absorbed the entire physical increase in production.

Production and exports of Russian fertilisers, 2019–2025, million tonnes

Revenues from fertiliser exports rose sharply due to a surge in prices as early as 2021, reaching $12.4 billion. According to World Bank data, prices nearly doubled in the post-pandemic year and increased by almost a further 50% in the first year of the war. As a result, despite a 7.3% decline in production in 2022 and a reduction in physical export volumes, export revenues jumped to $19.3 billion, according to the Russian Fertiliser Producers Association. From 2023, following the establishment of new logistics chains, growth in production and export volumes resumed, while prices declined.

According to RAPU’s calculations, export revenue stood at $15 billion in 2025. However, according to MegaResearch estimates, Russian fertiliser exports had already exceeded $15 billion by the end of 2024. This is corroborated by Re:Russia’s calculations based on mirror trade statistics from Russia’s trading partners, as Russian customs publishes data only for aggregated categories, with fertilisers included within overall chemical exports. In 2024, the 19 largest buyers, accounting for 90% of Russian fertiliser exports, paid nearly $14 billion, while total exports reached $15.5 billion, according to mirror data from UN customs statistics. In 2025, the same 19 countries purchased Russian fertilisers worth $17 billion, implying total exports may have risen to approximately $18.5–19 billion. Thus, Russia’s revenue from fertiliser sales last year increased by more than $3 billion and accounted for over half of the growth in chemical industry exports in 2025. In turn, the $6 billion increase in chemical exports, alongside rising exports of metals, textiles and certain other goods, helped to offset Russia’s losses from declining mineral exports significantly (→ Re:Russia: Low-Margin Successes). Overall, fertilisers now account for close to 5% of Russian exports.

The big picture in agri-geopolitics

Russia’s invasion of Ukraine and the subsequent sanctions against Russia led to a surge not only in oil and gas prices but also in food prices, as both Russia and Ukraine were major suppliers to global markets. Fertiliser prices also surged, as mentioned above, and were roughly three times higher than in 2020. In this context, Western countries did not impose direct sanctions on food and fertiliser supplies from Russia, which by this point had already taken a leading position in the global fertiliser market (according to RAPU estimates, it now ranks first with a 19% market share; prior to the war, its share stood at around 15%). Russia enjoys clear competitive advantages in this sector, as natural gas, a key input for many fertilisers, is available to domestic producers at relatively low cost.

The surge in food prices posed a risk of destabilisation in developing and low-income countries, while Western governments sought to avoid further deterioration in relations with the Global South amid rising geopolitical tensions with China and Russia. However, developed countries also sought to limit price rises. Thus, the US exempted Russian fertilisers from potential sanctions by classifying them as essential goods alongside agricultural products, medicines and medical equipment. The EU and the UK imposed sanctions against the owners of the five largest Russian fertiliser producers (EuroChem, PhosAgro, Uralchem, Uralkali and Acron), but not against the companies themselves which, by altering the formal ownership structure, were able to continue operating. Nevertheless, sanctions affecting transport and insurance still disrupted Russian supplies to Europe.

These developments underscored for the Russian government the key geopolitical dimensions of agri-industrial exports. First, such exports have significant prospects independent of Western markets, as demand for food is expected to grow primarily in developing countries. Second, they serve as an instrument for strengthening ties, including political ones, with countries in the Global South. Third, they are, in practice, shielded from Western sanctions pressure.

As a result, as early as September 2022, the Russian government adopted a new version of the agri-industrial complex development programme, including plans to increase agri-industrial exports to $47 billion by 2030. The Stockholm Centre for Eastern European Studies (SCEEUS), in its report ‘Food, Fertilisers and Global Leverage: Stepping Out of Russia’s Game’, explicitly described Russia’s new ambitions in agricultural markets as part of its geopolitical strategy. In 2025, further changes were made to the development programme: alongside ensuring Russia’s food security, it added the objective of ‘maintaining global food security’, while the export target for agri-industrial products (excluding fertilisers) was raised from $47 billion to $55 billion.

At first glance, this target appears overly ambitious. Agricultural exports, which reached $40 billion as early as 2021, have since stagnated within the $41–43 billion range for five years, according to the Federal Customs Service. This has been driven in part by the շարունակous decline in wheat prices, which have fallen by more than 40% from their 2022 peaks, returning to levels last seen in 2017–2018. A surplus has emerged in the global wheat market, intensifying competition, while domestic costs for Russian producers have increased, according to grain market experts. As a result, in order to maintain export revenues, Russian producers have been increasing shipment volumes, but their margins have declined sharply. Achieving the $55 billion target by 2030, however, appears to presuppose the integration of the production capacities of Ukrainian territories occupied by Russia. According to data from the US Department of Agriculture, these territories accounted for 21% of Ukraine’s wheat production, 19% of barley, 14% of rapeseed and 19% of sunflower.

As for fertilisers themselves, Andrei Guryev, head of RAPU, who was forced to step down as CEO of PhosAgro due to European sanctions, forecasts that by 2030 Russian companies will increase fertiliser production to 80 million tonnes, a rise of 23% compared with 2025, while exports will reach 58 million tonnes, up 29%. As a result, Russia’s share of the global fertiliser market is expected to grow from 19% to 25%. Maksim Malkov, a senior executive at the consultancy firm Kept, also expects production to rise to 80 million tonnes, but estimates that a significantly larger share, around 90%, will be directed to export, equivalent to more than 70 million tonnes. At current prices, this would imply export revenues exceeding $25–28 billion. RAPU’s estimates broadly align with the forecast by the International Fertiliser Association, which projects that global fertiliser demand will increase by 18 million tonnes, from 206 million tonnes in 2024 to 224 million tonnes in 2029, with Russian producers among the principal drivers of market growth.

Prospects and constraints

It should be noted that, compared with other key export sectors, namely oil and gas and metals, the geographical structure of Russian fertiliser exports has not changed as significantly. Rather than a reallocation, the pattern has been one of market expansion

According to mirror trade statistics, Brazil remained the leading buyer of Russian fertilisers compared with the last pre-war year of 2021, increasing its purchases by 12%, from $3.88 billion to $4.36 billion. India moved into second place, expanding imports sixfold, from $0.5 billion to more than $3 billion. The European Union, which had been the second-largest buyer before the war, reduced purchases by 7%, to below $2 billion. By contrast, the United States increased imports by 40%, to $1.8 billion, while China doubled its purchases to $1.6 billion. As a result, the combined share of the European Union and the United States in Russian fertiliser imports declined from 27% to 21%, while the share of the three largest founding BRICS countries rose from 41% to around 50%.

Main buyers of Russian fertilisers, 2024–2025, billion dollars

Customs statistics show that Russia has significantly increased its fertiliser exports to other Asian countries, including Indonesia, Malaysia and Thailand, as well as to Africa, for example South Africa. Russian companies also expect that Africa will become the fastest-growing consumer of fertilisers. During the first three years of the war, according to RAPU, Russia increased exports to African countries by 50%, reaching 1.9 million tonnes. Between January and October 2025, shipments to the continent, according to the Ministry of Agriculture, rose by a further 31%, to 2.1 million tonnes.

However, deliveries to countries in the Global South, which are geographically much further from the European market, come at a high cost. For example, according to estimates by Metals & Mining Intelligence (MMI), logistics costs in 2024 accounted on average for 7–13% of operating revenue, depending on proximity to ports, and in some cases reached 21%, excluding export duties. Under current constraints, including payment and insurance difficulties and restrictions on port access for vessels carrying Russian cargo, freight rates are rising and securing shipping capacity has become more difficult, noted Andrei Shepel, logistics director at Apatit (part of PhosAgro), in an interview with Kommersant in December 2025.

The share of so-called ‘friendly’ countries in Russia’s export structure is likely to continue increasing, as the European Union seeks to reduce its dependence on Russian fertilisers. In 2022, European countries formally introduced quotas on fertiliser imports from Russia, which broadly corresponded to the average annual volumes of Russian supplies. In the summer of 2025, they introduced a special duty mechanism on imports of nitrogenous (€40 per tonne) and compound fertilisers (€45 per tonne), which involves annual increases until 1 July 2028, when the rates will reach €315 and €430 per tonne respectively, effectively banning imports of these products into EU countries. Meanwhile, the US is pursuing a different strategy, increasing imports of Russian fertilisers to supply its domestic market while exporting its own products to Europe, notes independent analyst Maxim Shaposhnikov. As a result, European restrictions are to a large extent undermined, serving primarily to allow American companies to capture margins, while for Russian suppliers they translate into price discounts, additional logistics costs associated with transatlantic shipments and reduced profitability of deliveries to Europe.

Russian fertiliser producers also face pressure from the requirement to supply the domestic market at fixed prices and from a reduction in state support measures, writes Forbes. At the same time, the rapid expansion of the sector under sanctions has created the risk of market redistribution. In 2023, Dmitry Mazepin, who heads the RSPP commission on mineral fertiliser production and markets and has met with Putin since the start of the war, proposed creating a single trader for fertiliser exports to strengthen Russia’s influence on pricing in global markets. According to Bloomberg, the idea was discussed by Prime Minister Mikhail Mishustin and the head of the Ministry of Industry and Trade, Denis Manturov. Mazepin’s competitors feared that such a move could serve as a pretext for asset consolidation.

However, the sector’s principal players are major business figures, some of whom benefit from connections with individuals close to the Kremlin. One of the world’s largest producers of phosphate fertilisers, PhosAgro, originally created from the Apatit plant by Mikhail Khodorkovsky’s Menatep Group, was sold to a management team led by Andrei Guryev in 2005, when the Yukos case was in full swing. According to Vedomosti, Vladimir Litvinenko, rector of St Petersburg Mining University, who supervised Vladimir Putin’s doctoral thesis, assisted Guryev in resolving tax claims and in return received a stake in the company.

Russia’s largest producer of nitrogen fertilisers, SDS Azot, has been owned by Roman Trotsenko since 2016, a former adviser to Rosneft CEO Igor Sechin and the company’s offshore projects supervisor. The second-largest producer of ammonia and nitrogen fertilisers is Dmitry Mazepin’s Uralchem. After purchasing a stake in Uralkali, one of the world’s largest potash producers, Mazepin invited Sergey Chemezov, CEO of Rostec, to head its board of directors, having known him for a long time. In 2023, the prosecutor’s office raised objections regarding one of the energy assets of Andrey Melnichenko, founder of EuroChem, Russia’s largest fertiliser producer, but the entrepreneur managed to literally buy his way out of them. Nonetheless, the idea of consolidating the sector cannot be ruled out, as it continues to circulate among the most influential market participants.