The Cabinet of Ministers of Ukraine instructed the Ministry of Agrarian Policy and Food to issue licenses for the export of nitrogen mineral and chemical fertilizers in the amount of up to 210,000 tonnes by July 1, 2022, before that, the Ministry of Economy issued permits for supplies.
The corresponding resolution on the change of the licensee body (No. 458) of April 26 was published on the government website.
“The issuance of licenses for the export of goods specified in this paragraph of the notes is carried out on the basis of applications within a quota of 70,000 tonnes per month and on the basis of approvals that are provided by the Ministry of Agrarian Policy within one day without involving a subject of foreign economic activity in the order of interdepartmental exchange of information,” the decision says.
Earlier, by resolution No. 353 of March 24, the Cabinet of Ministers lifted the ban on the export of nitrogen fertilizers that it had introduced in early March, setting an export quota of up to 210,000 tonnes of products for the period until July 1, 2022. At the same time, the monthly export volume should not exceed 70,000 tonnes per month.
As reported, in early March, the government imposed a ban on the export from Ukraine of nitrogen, phosphorus and potash mineral or chemical fertilizers, as well as complex multi-component fertilizers.
Thus, the export of phosphate, potash and multicomponent fertilizers is still prohibited.
“I emphasize that this ban is of a forced and temporary nature and is used to restore the balance of certain goods in the domestic market and ensure the sowing campaign, which is extremely important in order to prevent a food crisis in Ukraine and the world,” Roman Leschenko, who served as Minister of Agricultural policy of Ukraine at that time, said.
Production of nitrogen fertilizers in Ukraine in 2020 increased 35% compared to 2019, to a record 5.1 million tonnes in five years, including the production of urea increased by 47%, ammonium nitrate – by 8%, urea-ammonium mixture – by 29%, the Association Ukrainian Agribusiness Club (UCAB) has reported on its website.
According to its data, there are five large plants producing nitrogen fertilizers in Ukraine: three plants of the Ostchem Group (in Cherkasy, Rivne and Severodonetsk), the Dniprovsky Plant of Mineral Fertilizers, a part of JSC Ukragrokhimholding, and the state-owned Odesa Port-Side Plant.
UCAB said that the plants of the Ostchem Group belonged businessman Dmytro Firtash last year produced two thirds of all nitrogen fertilizers in Ukraine, while the largest increase (2.5 times compared to 2019) was shown by the Severodonetsk plant and the Odesa Port-Side Plant.
According to the words of UCAB Director General Roman Slasten posted on the website, the growth in nitrogen fertilizer production is associated with the relatively low price of natural gas in 2020, a complete embargo on mineral fertilizers from the Russian Federation, as well as high demand for these products in the domestic and foreign markets.
According to the expert, Ukrainian agricultural producers continue paying additional margins to the domestic producer, since prices for nitrogen fertilizers in Ukraine last year were 15-25% higher than export prices.
“The only restraining factor in price growth in our monopolized fertilizer market is the availability of imports from Belarus, the EU countries and from other trade partners of Ukraine,” Slasten said.
In addition, imports of nitrogen fertilizers to Ukraine in 2020 more than halved, to 816,000 tonnes in kind and to $152 million in monetary terms due to the growth of domestic production. The largest share of imports (46.7%) was occupied by ammonium nitrate.
According to UCAB, the geography of fertilizer importers changed with the introduction of a complete embargo on mineral fertilizers from the Russian Federation in 2019. Ukraine in 2020 imported nitrogen fertilizers from 32 countries. The largest suppliers were Belarus with a share of 29%, followed by Poland with 23%, Georgia with 13%, Lithuania with 10%, Bulgaria with 10%, and Kazakhstan with 6%.
Ukraine in January-March 2018 exported 169,941 tonnes of nitrogen mineral or chemical fertilizers for $34.238 million, while imported 558,292 tonnes worth $117.265 million. According to the State Fiscal Service, nitrogen fertilizers exports to Turkey amounted to $14.846 million, Mexico to $7.085 million, Romania to $3.983 million, and other countries to $8.325 million. Nitrogen fertilizers in the first quarter of the year were imported from the Russian Federation for $21.929 million, Uzbekistan for $21.929 million, Lithuania for $15.372 million and other countries for $49.1 million.
In addition, Ukraine in January-March of this year exported 1,474 tonnes of ammonia (code 2814) for $433,000, imported 114,906 tonnes for $41.965 million. All the ammonia was imported from the Russian Federation.
As reported, in 2011, Ukraine exported nitrogen fertilizers for $1.69 billion, and imported – for $153.347 million, in 2012 – for $1.695 billion and $163.234 million, in 2013 – for $1.134 billion and $211.822 million, in 2014 – for $647.623 million and $175.747 million, in 2015 – for $521.552 million and $212.931 million, in 2016 – for $321.614 million and $216.095 million, in 2017 – for $ 125.427 million and $337.346 million.
In 2011, Ukraine exported ammonia for $594.942 million, and imported – by $0.006 million, in 2012 – for $640.281 million and $0.026 million, in 2013 – for $628.606 million and $40.412 million, in 2014 – for $314.713 million and $43.518 million, in 2015 – for $251.937 million and $28.676 million, in 2016 – for $40.569 million and $51.802 million, in 2017 – $42.969 million and $123.012 million.