‘Role of import tariffs in distorting EU fertiliser prices’

A combination of EU import tariffs, and an industry that is vertically integrated, is acting to keep European fertiliser prices at inflated levels, according to Nikolay Mizulin, a partner with the international law firm Mayer Brown.

“Black Sea Ammonium Nitrate prices have fallen from US$285/t to $210/t during the three month period from the beginning of January this year,” he told delegates attending the IFA International Fertiliser Conference.

“In contrast, French fertiliser prices have increased from €335/t to €350/t during the same period.”

Mizulin attributes this differing trend, for the most part, to the 6.5% import tariffs imposed by the EU on fertiliser imports.

“If these were to be removed, the input cost reductions enjoyed by EU farmers would exceed €200 million per annum. Food production costs will come down accordingly. And this is good news for both farmers and consumers.”

Mizulin also highlighted the lobbying power of the EU fertiliser manufacturing industry.

“The latest EU transparency register confirms that YARA ranks Number 1 in terms of companies’ declared expenditure on lobbying activities in Brussels,” he said.

“And this activity is focussed on having the current import tariffs retained in place.”

Dr Maximo Torero, from the International Food Policy Research Institute, told the conference that the global fertiliser industry follows a vertically integrated manufacturing and distribution model.

“In all the regions of the world the fertiliser industry is in the hands of a very small number of companies, he said.

“And this is reflected right along the production and distribution chain. However, our modelling has confirmed that the introduction of new players in the market will have a significant and downward impact on fertiliser prices at farm level.

“Organisations such as the EU must act to avoid trade restrictions within the fertiliser market. In tandem with this it is necessary to promote the sustainable use of fertilisers throughout the world.

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