29 May 2020, Friday, 17:46 397

Ukraine Will Receive Monopoly Dictate From Imports From Russia In Case Of Non-Introduction Of Quotas For Imported Fertilizers - FEU

Редактор: Daria Zubkova

The Federation of Employers of Ukraine (FEU) states that if quotas for imported fertilizers are not introduced, Ukraine will receive a monopoly dictate from imports from Russia.

Ukrainian News Agency learned this from the director general of the Federation of Employers of Ukraine, Ruslan Iliichev.

“It is obvious that if we do not preserve the domestic production of fertilizers and surrender our market to Russian or other producers, then in the next year we risk getting a monopolistic dictatorship in the industry from the import side. Moreover, in many countries the industrial support system is incommensurable with Ukraine. For example, in Turkey, the majority of chemical enterprises are located in industrial development zones with a full system of benefits and incentives,” Iliichev said after a meeting of chemists and agrarians at the Ministry of Economy regarding quotas and protection of the Ukrainian fertilizer market.

According to him, the chemical industry today is an industry with a multiplier of 3-5, with high added value.

“Each chemical company has a number of contractors and manufacturers of related products, as well as logistics, transportation, energy and utilities. These are about 100,000 jobs. In the current situation, when the number of unemployed is constantly growing, the multiplier in the industry can provide a serious incentive for creating jobs and will help smooth out spikes in unemployment. This is an opportunity not only to create, but also to save jobs," Iliichev said.

He emphasized that a large number of chemical enterprises in Ukraine are of strategic importance and are city-forming.

“As for the balance of interests of agrarians and the chemical industry... As a federation, we unite both of them. And we do not believe that in Ukraine there is a confrontation between domestic chemists and agrarians. Today, Ukrainian producers can provide 100% of the needs of agrarians in the nitrogen group, and up to 40% in complex fertilizers. Today, controversial issues lie more in the plane of interests of traders of imported products. It is more profitable to trade imported goods, there is a large trading margin," Iliichev said.

According to him, quotas do not change the structure of the market.

“As Taras Kachka (Deputy Minister of Economic Development, Trade and Agriculture - Trade Representative of Ukraine) rightly noted, quotas are needed in order to maintain the diversification and predictability of imports. And in fact, they will be close to the actual imports that we have now. This paradox is that the investigation lasted almost a year and concerned the period until the middle of 2019. The fertilizer market has changed since then. In the first quarter of 2020, imports of complex fertilizers decreased by 18% and nitrogen - by 59% compared with the first quarter of last year. That is, imports in Ukraine are gradually moving towards the parameters that are proposed to be fixed," Iliichev noted.

As Ukrainian News Agency earlier reported, the Interagency Commission on International Trade has decided to extend the period of the special investigation into imports of nitrogen fertilizers into Ukraine, regardless of country of origin, to 300 days (tentatively until July).

Earlier, the Ministry of Economic Development, Trade and Agriculture announced that it intends to initiate the introduction of quotas for the import of mineral fertilizers.

On August 21, 2019, the Interdepartmental Commission on International Tradelaunched two special investigations regarding the import into Ukraine of certain nitrogen fertilizers, in particular ammonium nitrate and lime-ammonium nitrate, urea and urea-ammonia mixture, regardless of the country of origin and export; mineral fertilizers with nitrogen and phosphorus content and mineral fertilizers with nitrogen, phosphorus, potassium content, classified by Ukrainian Commodity Coding System code 3105, regardless of the country of origin and export.

The initiators of the case were Dniproazot, Rivneazot, Cherkasy Azot and Severodonetsk Azot.

In May 2019, the Cabinet of Ministers amended the list of goods prohibited from import from Russia, including nitrogen and potassium fertilizers.

This decision entered into force from July 1.