OSTCHEM nitrogen holding plants produced 515.5 thousand tons of mineral fertilizers in the 1st quarter of 2023. This is 36.2% more than in the same period of the previous year when 378.5 thousand tons were produced.
In total in the 1st quarter of 2023 Cherkasy “Azot” produced 387.4 thousand tons and “Rivneazot” – 128 thousand tons . At the same time in March Cherkasy “Azot” updated the maximum indicator since the beginning of the full-scale war having produced 137.8 thousand tons of mineral fertilizers.
[1]“The 1st and 2nd quarters are key in agricultural production cycle because during the spring sowing farmers apply most of the nitrogen fertilizers. In the 1st quarter we achieved high production results. This season is different from all previous ones. The first feature is that “hot” season of active purchases has increased by almost two months. The second is that the overall demand for fertilizers is recovering much faster than everyone expected,” said Oleg ARESTARKHOV, head of Group DF corporate communications department.
The key products manufactured by OSTCHEM plants were urea, UAN, ammonium nitrate, LAN. The volume of urea production in 2022 increased by 4.7 times from 22.8 thousand to 106.5 thousand tons and the volume of UAN production increased by 2.1 times from 50.9 thousand tons to 108.5 thousand tons . The production volume of ammonium nitrate increased slightly from 217.1 thousand tons to 255.4 thousand tons . At the same time production of LAN decreased from 62.3 thousand tons to 10.6 thousand tons.
“OSTCHEM production capacities are loaded in such a way as to cover the demand of farmers as quickly as possible and to supply fertilizers in accordance with the contracts. The decrease in gas prices made it possible to lower the selling prices of mineral fertilizers. As fertilizers became more affordable we started to sell more and we achieved good results. This spring high occupancy of businesses lasts longer than usual. We follow the market. The structure of production corresponds to the structure of demand. Production load of the plants, timing of repair campaign will depend on further demand ,” Oleg ARESTARHOV emphasized.
Market trends:
- OSTCHEM enterprises began to supply fertilizers to de-occupied territories actively (Kherson, Mykolaiv, Chernihiv, Sumy regions). Farmers of these territories delayed purchase of fertilizers for a long time due to military risks. In addition, many farms have completed land demining and have established logistics.
- Among the factors restraining the growth of fertilizer market is an increase in marketing and logistics risks of conducting agricultural business, such as uncertainty of prospects of the grain agreement, restrictions on import of Ukrainian grain which were introduced in April 2023 by some EU countries.