Farmers are once again turned into hostages of somebody’s financial interests, and no one pays attention to upcoming spring sowing season.
Imported mineral fertilizers, which were suddenly blocked all over the border perimeter in December, is finally getting customs clearance. However, such a long delay, and even without any explanation for the reasons for the importers, has already provoked a price run-up for this product, which is likely to grow further. In addition, the problems on the way from the manufacturer of fertilizers to a final consumer, i.e a farmer, arise not for the first time, and usually before sowing campaigns.
The reason for the stop of the fertilizers import at the border was allegedly the fight against the smuggling of Russian fertilizers, which wasn’t announced at the official level. In the Ukrainian Agrarian Confederation, it is said that the ice – after sampling different fertilizers and passing through official laboratories certified to work with the customs – has been broken. Both Kherson and Mykolaiv ports and some other customs are already getting customs clearance for mineral fertilizers, but only from some countries: from Bulgaria, Georgia, Turkey, etc. But the Belarusian product is still standing – it is likely being checked for involvement with the Russian manufacturers, that are currently in the sanction list.
Foreign bags for Russian Saltpeter
The whole situation has already led to a rise in fertilizers’ prices, so farmers are looking for additional money that they will have to invest in the sowing. In addition, nobody understood whether there was some smuggling, what are the claims to importers and whether the government plans to intervene in solving the problem and somehow help domestic producers who suffer from a high gas price. On the one hand, almost everyone has already mentioned the fact that mineral fertilizers, primarily Ammonium nitrate, which is needed the most, are imported from Russia. On the other hand, there was no official confirmation of this information. They say, fertilizers produced by Russian companies are re-packed in bags of producers of other countries, and this is how they import Russian chemicals to Ukraine. Not only Belarusian suppliers are suspected in agreement with the Russians, but also producers from other countries that came to our market, when due to the measures, taken at the level of the country, the share of Russian product decreased.
In fact, two options are possible: either they bring it using the “gray” schemes, one of which are those foreign bags for the Russian Saltpeter, or they do not bring it, and then we can make a conclusion that someone gets benefits from the rise of fertilizer prices just before the spring sowing. Anyway, it’s time to deal with the situation, which has been lasted since December. Even the fact that customs began to let them in is not the end, it doesn’t give us a chance to leave this situation out of control. Those state bodies that would have tackled the issue, despite the scandal throughout the country, say nothing, so it seems that the second option is more likely to be true. Or both of them are likely to be true. And that means that the implementation of the first one is widely used to hide their own interests while implementing the second one.
Serhii Ruban, the head of the Union of Agricultural Chemists in Ukraine says that speaking of the participation of importers in such schemes, it should be noted, that Ukrainian importers make agreements with the producers of fertilizers, otherwise it is impossible to get origin certificates of the product. Buying fertilizers from the “second hands” at the border, a large additional fee has to be paid. Free trade agreements and the avoidance of double taxation have a fairly hard enforcement procedure. In addition, the expert says, re-export of Russian fertilizers is not profitable. Supply of Russian fertilizers to Lithuania, Kazakhstan, Belarus, Uzbekistan, Turkey, Georgia, Poland, Bulgaria, the United States, their re-packaging, getting of internal documents and their transporting to Ukraine add to their value from 50 to 100 dollars per ton (with the current export Saltpeter price of 168-175 dollars per ton FOB “Black Sea”).
Text by Larysa Vyshynska
