Indonesian companies may refuse Russian fertilizers – Kommersant

Indonesian national fertilizer group PT Pupuk Indonesia (Persero) may refuse to import products from Russia due to logistics difficulties, Gatoet Gembiro Noegroho, vice president of the company, said. According to him, it will be possible to replace supplies from Russia by reorienting to the Middle East.

According to the vice-president of Pupuk Indonesia, significant difficulties in logistics began against the backdrop of the Russian-Ukrainian conflict. “Since the beginning of the war, prices have risen significantly and cannot return to normal until now,” he noted (quoted from Sindonews).

Gatoet Gembiro Noegroho noted that to prevent a shortage of raw materials needed for domestic fertilizer production, the company is evaluating supply options from Morocco, Jordan and Egypt, as well as from neighboring countries such as Vietnam, Laos and Myanmar. Mr. Noegroho explained that such diversification is necessary for greater stability in fertilizer production.

“Until now, we have received potash from Canada, Russia, Belarus and Jordan. But we are also exploring the possibility of working with other potash-producing countries, such as Laos, to ensure that the supply of raw materials to maintain national food security is sustainable,” he added.

In 2021, trade between Russia and Indonesia increased by more than 40%, and by 65% ​​in the first five months of 2022. In June last year, Russian President Vladimir Putin assured his Indonesian counterpart Joko Widodo that Russia was fully prepared to meet the demand of “agrarians from Indonesia and other friendly states for nitrogen, phosphate, potash fertilizers and raw materials for their production.”

In May, Russia extended the grain deal concluded in the summer of 2022 with Ukraine with the participation of the UN and Turkey. The agreement is valid until July 17 and involves the opening of ports in Ukraine for the export of agricultural products, as well as the unblocking of the export of food and fertilizers from the Russian Federation. To further extend the deal, Russia, in particular, requires Rosselkhozbank to be reconnected to the SWIFT international payment system. Russian Foreign Ministry saidthat July 18 will be the time for the completion of the transaction. Also in the Kremlin declaredthat do not see the prerequisites for extending the deal.

Milena Kostereva