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Prices for Ukrainian fertilizers increase by 10-15%
KYIV. Aug 26 (Interfax-Ukraine) – Ostchem Holding, which unites Group DF’s nitrogen chemistry enterprises, has raised prices for mineral fertilizers by 10-15%, according to an exclusive commentary by Group DF’s press service to Interfax-Ukraine.
"Prices have been revised due to a sharp rise in gas prices and exchange rate fluctuations. We keep the price to the last, because we understand that it is difficult for farmers now. However, the change in market conditions does not leave us much room for action," Oleh Arestrakhov, Director of the Corporate Communications Department of Group DF International, noted in a commentary to the agency.
He pointed out that the cost of natural gas accounts for more than 70-80% of the prime cost.
According to information on the Group DF website, the retail price of ammonium nitrate with delivery to the household within 200 km increased by 8.7%, to UAH 34,800 per tonne; carbamide went up by 6.8%, to UAH 39,800 per tonne, limestone-ammonium nitrate – by 11.8%, to UAH 28,200 per tonne, and UAN demonstrated the largest growth – by 15.2%, to UAH 32,500 per tonne.
Arestarkhov stressed that under all previously concluded agreements with farmers and agricultural holdings for the purchase of fertilizers at a lower price, Ostchem "would 100% fulfill its obligations to supply fertilizers," which proves the effectiveness of buying fertilizers in the low season.
"Now two factors will directly influence the growth of solvent demand for fertilizers and prices – the unblocking of grain exports by sea and prices on the Chicago Stock Exchange. So far, the trend is disappointing: grain prices are falling and major fertilizer producers in the EU are shutting down one by one due to rising gas prices," Group DF’s Director of Corporate Communications said.
According to him, what is happening in the fertilizer market is part of a chain reaction that began last fall, while the war was only a catalyst for this reaction.
"Therefore, there is every reason to expect further growth in prices for fertilizers and a decrease in their availability both in global markets and in the domestic market. In Ukraine, fertilizer consumption has fallen by at least 30-40%, and this is the task of the government and the Cabinet of Ministers to support farmers as effectively as possible through various tools so that there is no significant reduction in the harvest in 2023," Arestarkhov said.
In his opinion, producers will reduce margins, but they will not be able to sell fertilizers below cost.
Group DF consolidates the assets of businessman Dmytro Firtash in the gas distribution, chemical, titanium and port industries, as well as in agriculture and media. Ostchem is a Group DF nitrogen holding uniting the largest producers of mineral fertilizers in Ukraine. It includes Rivneazot, Cherkasy Azot, as well as Severodonetsk Azot and Stirol, which do not work and are located in the occupied territories.
