Ukraine: Fertilizer crunch could come in 2023; crop losses estimated at $11.5 bn from 2022

With today, 24 February, marking one-year since the Russian invasion of Ukraine, the outlook for fertilizers could tighten in 2023.

The invasion has caused an estimated US$11.5 bn loss in crop production in 2022, according to a report by Latifundist Media, part of Ukrainian finance group Fortior Capital.

The report outlines some of the production cost increases suffered by Ukraine’s agricultural sector in 2022. Fertilizer costs increased by an estimated at $377 million, along with fuel which jumped by $480 million.

When it comes to specific fertilizer products, the price of NPK triple 16 has risen by 116 % between September 2021 and August 2022, rising from 18 UAH thousand/ tonne to 39 UAH thousand/ tonne.

The price of potash has risen by 169 % between September 2021 and August 2022, rising from 16 UAH thousand/ tonne to 43 UAH thousand/ tonne. The rise in ammonium nitrate was not as steep, rising by 94%, from 16 UAH thousand/tonne to 31 UAH thousand/tonne. This reflects Ukraine's large domestic AN capacity.

Input sufficiency for the fall sowing season in 2022 was estimated at 46% for fertilizers. The report notes that spring sowing was completed at a higher percentage (68%) as producers purchased most of their fertilizers and seeds and PPPs in 2021. The season for 2023 will be worse, says the report. “Winter crops area has decreased by 38%, and the availability of inputs has fallen sharply.”

“While there is a decrease in supply of both imported and domestic products, there is a decrease in fertilizer consumption,” the reports says, noting that imports from Belarus have declined from a value of around $572,000 in 2021 to $140,000 in 2022.

Decline in crop production
The total loss of crop production in 2022 is estimated at a total value of $11.5 bn, according to the Latifundist Media report. The largest loss is in sunflower at $3.032 bn, followed by wheat at $2.513 bn. The loss of corn is $2.143 bn and barley is $837 million.

Exporting agricultural products still remains a problem. The Grain Deal from July 2022 unblocked three Ukrainian ports – Odesa, Chornomorsk and Pivdennyi. However, the ports of Mykolaiv remain blocked. Mykolaiv harbours accounted for 35% of Ukraine’s food exports, says the report.

For more, see New AG International’s special report last year on the impacts of war during the first months with interviews with agribusiness producers in Ukraine: Ukraine - farming on the front line, see here.

In 2021, New AG International did a country report on Ukraine, here.
Ukraine – Land of Black Gold
This issue's regional report is on Ukraine, a big agricultural exporter and becoming big in biologicals. Did you know it's one of the biggest biofertilizer markets in Europe?