American officials are reportedly encouraging companies to ease supply shortages by buying Russian goods
US officials are “quietly” urging agricultural firms to boost Russian fertilizer imports amid growing shortages and a looming international food crisis, Bloomberg reported on Monday, citing unnamed sources familiar with the discussions.
Companies fearful of US sanctions have apparently all but ceased purchases, despite loopholes built into the penalties.
The US and most EU countries have imposed tough trade restrictions on Moscow since its attack on Ukraine in late February, and are now facing a dilemma as shipping firms seek to avoid carrying Russian fertilizer. The sanctions make exemptions for the item – of which Moscow is a key global exporter – but companies have nonetheless been reluctant to buy, helping to drive a 24% drop in Russian fertilizer sales this year.
The conflict in Ukraine has exacerbated food shortages around the globe, both Russia and its neighbor account for a large portion of worldwide grain exports, and has driven prices to record highs.
Though Washington has blamed Moscow for the crisis, accusing it of barring Ukrainian grain from world markets, the Kremlin says Western sanctions are largely responsible for the price spikes and shortages of staple goods. Russian officials have also criticized Kiev for its reluctance to remove naval mines from some of its ports, citing that as another factor behind the shortfall. Ukraine, however, insists the weapons are needed to defend against Russian attacks.
Russia has called on the US to offer additional assurances to firms looking to buy fertilizer, hoping to encourage companies wary of the sanctions. Talks on the matter are moving “slowly,” according to Bloomberg, but American officials have nonetheless approached some firms about the purchases.
The United States and Germany are also aiming to boost exports of Ukrainian produce by rail in the coming months, despite the logistical challenges caused by the conflict.
“We’re looking at a substantial shortfall,” James O’Brien, who leads the US State Department’s Office of Sanctions Coordination, told a virtual briefing earlier this month. He added that “We’re working together with our partners to get about half of what Ukraine exports out each month,” but the effort will take time.