The US is quietly encouraging shipping companies and agricultural companies to purchase and transport more Russian fertilizer to lower global food costs as Western sanctions have disrupted supplies, Bloomberg reported on Monday.
US and EU sanctions on Russia technically have exemptions for fertilizer, but the sanctions discourage shipping firms, insurance companies, and banks from doing business with Russia altogether. As a result, Russia’s fertilizer exports are down 24% this year.
Citing people familiar with the matter, the Bloomberg report said the US officials were surprised by the caution companies were taking over the sanctions. But history shows, even if there are built-in exemptions, sanctions still cause shortages of food and humanitarian goods. For example, US sanctions on Iran technically have exemptions for medical goods but still have caused medicine shortages in the country.
The effort to boost Russian fertilizer exports is part of negotiations involving the UN to increase deliveries of fertilizer, grain, and other agricultural goods from Ukraine and Russia. The West has blamed Russia for blocking Ukrainian grain exports, while Moscow is pointing the finger at Kyiv for mining its ports and not allowing ships to leave.
Russia has been in talks with Turkey on how to get Ukrainian grain shipments moving again. The two countries agree that Ukraine must de-mine its ports, including Odesa. But Kyiv wants security guarantees from Moscow that it won’t attack if the mines are removed.
The fact that Western sanctions are raising global food costs is not a surprise as President Biden warned the sanctions campaign would lead to “real” food shortages and hurt the US and Europe.