European Union will suspend the existing 5.5 and 6.5 percent tariffs on ammonia and urea, which are used as raw materials for nitrogen fertilizers. 

The justification for the amendment to the regulation prepared on the proposal of the European Commission states that the market for certain raw materials of nitrogen fertilizers in the EU is highly dependent on imports from third countries. According to statistical data, in 2021 the Union imported 2.9 million tons of ammonia and 4.7 million tons of urea for the production of nitrogen fertilizers. Although a significant proportion of EU imports comes duty-free, the EU also imports large quantities from countries with a duty rate of 5.5 to 6.5 percent for nitrogen fertilizer raw materials.

The significant increases in producer costs and the resulting rise in food prices are both worrisome from the point of view of the purchasing power of consumers and the incomes of EU agricultural producers. According to the Commission’s point of view, reducing the cost of mineral fertilizers and ensuring their availability can be a short-term remedy for this, and later the transition to the use of sustainable types of fertilizers or fertilizing methods. During this time, the EU fertilizer industry must have access to the necessary imported products, including the raw materials required for the production of fertilizers within the EU.

The supply of nitrogen fertilizers has narrowed on the international markets, and the EU import duties on the intermediate raw materials of fertilizers, including ammonia and urea, are in themselves a deterrent for exporters to enter the EU market, since similar duties are not in force in many countries of the world. 

The suspension of customs duties can significantly improve the supply of domestic fertilizers. András Sándorfy, managing director of Marton Genetics, which produces and distributes seeds, told Világgazdaság. The expected decrease in fertilizer prices is likely to be accompanied by a decrease in grain prices, but it is possible that the latter will fall more than the decrease in input prices would justify.