By KYIV. Nov 14 (Interfax-Ukraine) – The situation on the fertilizer market is approaching a crisis; while the monthly purchase of ammonium nitrate exceeds 100,000 tonnes, according to data for October, only 62,000 tonnes were purchased, the Infoindustria specialized analytical agency reported.
According to the report, 21,000 tonnes of the purchased volumes of ammonium nitrate were imported, the rest was domestic. Two operating Ukrainian factories produced 75,000 tonnes of ammonium nitrate, of which 34,000 tonnes were delivered to warehouses.
The analysts said that ammonium nitrate accumulates in factory warehouses due to the low activity of farmers. As an example, they cited information that about 60 applications were received for a small tender of a small agricultural holding. Such price competition, according to market experts, indicates a significant excess of fertilizers on the market.
At the same time, Ukrainian fertilizers are not in great demand among European farmers due to increased competition in the EU from products of non-European producers.
“Traditionally, by now, plants are already producing nitrogen fertilizers for the spring, even despite the lack of money, there is an accumulation of the product in warehouses, but many of these fertilizers were bought by traders, while traders are without working capital,” the experts said, voicing another reason for the overstocking of warehouses in fertilizer factories.
They said that low gas prices in Ukraine compared to neighboring countries allow plants to still operate, despite the lack of ransom.
“The current situation is bringing us closer to a crisis, because plant resources are being depleted, and the market cannot absorb the entire volume of production. Shutdowns may begin when warehouses at plants are filled or when money simply runs out, because gas has begun to rise in price. This does not mean that “farmers will sow without fertilizers. Conventionally, if plants are shut down on December 1, there will be enough fertilizer for only 2/3 of the market needs,” Infoindustria said, admitting that pent-up demand will provoke a significant increase in the price of fertilizers as early as February 1.
