In order to cover the problem of overvalued prices, monopolies and deficits on the domestic fertilizer market, on May 16, in the framework of Agri Invest Forum 2018, the first discussion of representatives of the agrarian sector and the chemical industry will take place in Ukraine.

The government needs to provide domestic chemical companies with their own raw material base in order to enable them to supply their products at competitive world prices, and farmers did not have to overpay for fertilizers.

Mikhail Sokolov, deputy chairman of the Ukrainian Agricultural Council (UAC), announced this.

"We demand from the government that the chemical plants are provided with their own raw material base, because this is the only option in which domestic enterprises will be able to supply products at competitive world prices. Otherwise it turns out that the prices for fertilizers inside the country are almost 40% higher than the world. That is, the chemical industry does not work stably, and farmers are forced to constantly pay for fertilizers. Therefore, this issue needs to be addressed at the state level", - said Sokolov.

According to the vice-chairman of the UAC, the exit from the situation could be the provision of state guarantees for Chinese loans for the construction of syngas plants that would produce fertilizers from gas. However, the relevant initiative was still blocked at the state level, despite the possibility of funding from the State Development Bank of China.

The deputy chairman of the UAC added that currently available fertilizer production capacity in Ukraine is 2-3 times higher than the current requirements of the domestic market. In other words, in the export market, Ukrainian enterprises are not competitive at the price.

The government has decided to increase the competitiveness of domestic plants in the domestic market by imposing duties on the import of Russian fertilizers, which are sold at a more favorable price and, as a result, are the main competitors of the Ukrainian ones. However, this negatively affects domestic farmers, who have to overpay, since duties only led to rising prices. And at the same time Ukrainian producers of fertilizers limit the Russian import a little helps.

It should be noted that major international players have not yet entered the domestic market: China and the countries of the Middle East. The reason is in the absence of today's opportunities for handling fertilizers from Panamax type vessels in Ukrainian ports. However, this problem will eventually be solved, and then prices for nitrogen fertilizers will fall, and the share of imports will increase even more. Excluding duties, Arabic fertilizers will be more expensive than Russian but much cheaper than domestic products, since Arabs produce fertilizers from their own natural gas, which goes to chemical enterprises at cost, while the Chinese produce them from coal. In other words, when the Arabs come to the domestic market, all Ukrainian enterprises, except DniproAzot.

"The story promises to be dramatic, and the final – to be tragic. The trouble is that Ukrainian agrarians will pay for this theatrical performance of the absurd, and then - the workers of the enterprises Ostchem and Odessa Port Plant, because without a radical solution to the problem, they are doomed sooner or later to lose their jobs and livelihoods ", - summed up Sokolov.

Certificate. The NSC "Institute of Agrarian Economics", the consulting agency "Ukragroconsult" and the "Social Monitoring" center on request of the UAC,  conducted a study and found out that the loss of the domestic agricultural sector due to the lack of yield due to the high prices for nitrogen fertilizers inside the country, is made annually more than 32 billion UAH.

Because of the high prices for fertilizers, farmers make them much less than normal. As a result, Ukrainian soils are depleted - every year, every hectare of Ukrainian agricultural land loses from 200 to 400 kg of nutrients.