The war poses a big threat to producers of fertilizer as such plants work with explosive and toxic materials. Many Ukrainian producers of fertilizer are near the hostilities.
In particular, Sumykhimprom was shelled, which caused an ammonia leak. Severodonetsk Azot association (15.3% of nitrogen fertilizer capacities in Ukraine) is in the line of fire near uncontrolled territories and it is not working. Odessa port plant (14.4% of the nitrogen fertilizer capacities) was stopped in the beginning of the war. Rivneazot is located in a potentially dangerous area where missile attacks are possible.
On March 12, 2022, Ukraine introduced fertilizer export ban to maintain market balance during the war. Almost 45% of Ukrainian nitrogen fertilizer exports were to the EU in 2021. The biggest importers of Ukrainian nitrogen fertilizers were Romania (190 thousand tonnes), Italy (138 thousand tonnes), France (104 thousand tonnes), Hungary (88 thousand tonnes), Spain (56 thousand tonnes), Bulgaria (50 thousand tonnes), Poland (40 thousand tonnes). So, EU countries will need supply nitrogen fertilizers from other sources.
The capacities of Ukrainian producers allow us to fully meet the needs of the domestic market for nitrogen fertilizers. But now we assume that most of the fertilizer capacities has already been suspended due to both the danger of hostilities and problems with the supply of raw materials. The resumption of production will depend on the timing of the war end and the nature of the damage received.
At the same time the production of complex fertilizers is underdeveloped in Ukraine. In 2021 1.9 mln tonnes of complex fertilizers were imported in Ukraine. The biggest source of importing complex fertilizers is Belarus (617 thousand tonnes). It is 32.1% of the total imports of complex fertilizers. So, Ukraine will need to find alternative sources of imports to substitute imports from Belarus.
Read more in the analyst study GMK Center.
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