KIEV: The Ukrainian government has increased “anti-dumping” tariffs on mineral fertilizer imports from Russia, the latest in controversial efforts to protect Ukraine’s uncompetitive domestic fertilizer producers. The ministry alleges that Russian producers have frequently violated the procedures for importing to Ukraine and attempted to avoid paying tariffs by changing the descriptions of the fertilizers being imported. This led the ministry to conclude that the previous tariffs were not enough to prevent dumping by Russian producers.
But agricultural economists cast doubt on claims that Russian producers are dumping. They note that Ukraine’s internal market is largely monopolized, with four fertilizer plants belonging to oligarch Dmyrto Firtash’s Ostchem Group controlling upwards of 80 percent of the domestic market for several varieties of mineral fertilizer. Firtash and Ostchem actively lobby to protect their monopoly, the economists say. Ukraine’s agricultural sector loses $250 million dollars a year by overpaying for fertilizer, he says.
Earlier this month, Ukraine’s Cabinet of Ministers approved an embargo on importing mineral fertilizer from Russia, but the measure is not yet in place. Mykhailo Sokolov, deputy director of the All-Ukrainian Agrarian Council, believes this is a bad idea because Ukraine does not even produce all the varieties of fertilizer it needs. In July 2017, the Anti-Monopoly Committee of Ukraine (AMCU) ruled that Ostchem set unreasonably high prices on all types of nitrogen fertilizer in 2015-2016 and fined the company. The committee fined the company the equivalent of 10 percent of its 2016 earnings and required it to set market prices.
