(Bloomberg) -- Poland imposed fresh sanctions on three more companies allegedly selling fertilizers made in Belarus by Grodno Azot as it seeks to shield its local producers from cheaper imports.
European Union firms, including Poland’s Orlen SA’s Anwil and Grupa Azoty SA, have complained about massive imports from Russia and Belarus. The two countries benefit from direct access to cheap gas used in fertilizer production and have been able to skirt some existing EU sanctions.
World Chem Trading co. LLC, Technospetstrading LLC and Technospetstrading Export LLC were sanctioned on Wednesday for selling nitrogen fertilizers from Belarus in Poland, according to the country’s tax authority and the Interior Ministry.
Poland argues that Grodno Azot, sanctioned by the EU since 2021, is the only producer of this kind of fertilizer in Belarus and that reselling supplies from the firm is a violation of the restriction. NFT LLC was penalized last month under similar allegations.
The combined urea sales by all the four sanctioned companies in Poland accounted for around 44% of total urea imports from Belarus over the past three years and exceeded 100 million zloty ($24.6 million) in value, according to Poland’s tax authority, which is responsible for fighting the illegal imports.
“It shouldn’t enter our customs territory due to the sanction regulations,” Zbigniew Stawicki, a deputy head of the tax authority, told Bloomberg News in a phone interview.
He warned that Poland may also target companies selling fertilizers from Russia if there is evidence of breaching sanctions.
Poland’s imports of fertilizers from neighboring Belarus surged almost eightfold to 228,000 tons in the first nine months of 2024 from a year earlier, data from the Polish Institute of Agricultural and Food Economics show. Imports from Russia soared 140% to 952,000 tons in the same period.
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Poland would like to impose 30-40% duties on fertilizers imported from Belarus and Russia, according to the state assets minister, as chances are rather slim that the EU will reach unanimity to introduce full sanctions.
At the same time, reducing imports may stir outcry among farmers due to a potential increase in fertilizer prices just as Poland faces a key presidential election in mid-2025.
“It doesn’t have to be that way, but traders will certainly take advantage of the situation and raise their prices,” said Tomasz Wlostowski, a managing partner at EU Strategies, a Brussels-based consultancy.
--With assistance from Konrad Krasuski.
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