Ammonium nitrate in Ukraine as of July 26, 2021 had risen in price by 80% compared to the same date in 2020, to UAH 12,100 per tonne ($448 at the current exchange rate), price growth to the April 2015 level due to the rise in prices for nitrogen fertilizers in international markets, the Ukrainian Agribusiness Club (UCAB) reported on its website on Tuesday.
“The increase in prices for nitrate occurred amid the growth of the cost of nitrogen fertilizers – urea, ammonium nitrate and urea-ammonium mixture in the international markets. First of all, this is due to the growing demand in Asia and the rise in prices for natural gas, which is one of the main components in the production of fertilizers. As a result, the international prices for ammonium nitrate in the Black Sea ports last week reached $310 per tonne,” the UCAB said.
According to the UCAB, the difference between the cost of ammonium nitrate in the domestic market and international quotations in the Black Sea ports increased from an average value of $45 per tonne in 2020 to the current $63 per tonne (by 37%). This indicator reflects additional logistics costs for fertilizer importers, while for the domestic producer it is mainly an additional net margin in price.
The Ukrainian Agribusiness Club said that in Ukraine, ammonium nitrate is produced by three enterprises of the Ostchem holding company of the Group DF group – PrJSC Rivneazot, PrJSC Azot (Cherkasy) and PrJSC Severodonetsk Azot (Donetsk region).
“In June 2021, more than 9,000 tonnes of ammonium nitrate was exported from Ukraine at an average price of $249 per tonne, which is significantly lower than the price of imports and the domestic market. Thus, Ukrainian agricultural producers continue to supply nitrogen fertilizers at inflated prices,” UCAB said.
An increase in fertilizer prices with a simultaneous decrease in prices for grain crops in Ukraine significantly reduces the expected profitability in crop production and has a negative impact on the financial indicators of the agricultural industry: at the beginning of the year, the price of milling wheat reached UAH 9,000 per tonne, having decreased by a quarter as of the end of July, to UAH 6,500 per tonne.
Prime Minister of Ukraine Denys Shmyhal has ordered relevant officials to check and report on the ammonium nitrate storage conditions in Ukraine by September 15, 2020.
“Carry out extraordinary measures for government supervision over observation of the legislation in the spheres of work safety, security against manmade disasters and fires by the economic entities that store ammonium nitrate in bulk for its use at any enterprises, as well as use it for the production of calcium nitrate, compound and liquid fertilizers,” the press service of the Cabinet of Ministers of Ukraine said.
The prime minister issued this instruction for Infrastructure Minister Vladyslav Krykliy, Head of the State Emergency Service Mykola Chechotkin, Acting Head of the State Labor Service Vitaliy Sazhyenko, Chief of the National Police Ihor Klymenko and the heads of the regional governments and Kyiv City State Administration.
