The Hungarian Ministry of Agriculture was consulting last Friday, Nov 19, with wholesalers and retailers in the Hungarian fertilizer market, “how to keep Hungarian fertilizers at home”. “All possible means must be used to secure the supply of Hungarian farmers with fertilizers” was stated on the portal of Agrokep.hu
According to the President of the National Chamber of Agriculture, farmers expect Hungarian fertilizers to stay in the country. “If the owner of Nitrogénművek Zrt, Mr. László Bige would continue in this way (exporting fertilizers and driving prices up) a more serious government intervention may be needed”. It was even pointed out, that the state would take over the factory to have production under governmental control.
Nitrogénművek Zrt publishes the following statement:
Nitrogénművek has raised its concerns about market instability and arising risk factors, well in advance (end of September) by contacting the Ministry of Agriculture and the Hungarian Chamber of Agriculture. The company as the sole nitrogen-based fertilizer producer and major distribution company was not invited to any discussion.
The organisation is running the factory on its maximum production capacity throughout the year. The factory had its planned maintenance cycle in June 2021, which lasted for 6 weeks. An unplanned shut down happened in February and another one in Q3. Nitrogénművek suspended its commercial activity for four weeks in early autumn due to the skyrocketing energy prices.
Since beginning of October Nitrogénművek has commenced its commercial activity again and the company is offering fertilizers continuously to Hungarian farmers, at price levels, which are on par with the central European commodity price level. We notice also historically high fertilizer prices all over the globe, which is the result of depressed fertilizer prices in the period 2016-2020 and subsequent underinvestment of the industry.
Nitrogénművek Zrt follows its approved business plan when it comes to volume allocation to its foreign markets. Monthly volumes which are not needed in certain markets, are reallocated to more demanding markets.
We, the management of Nitrogénművek are urging our customers in Hungary and abroad to buy fertilizers before the fertilizer application season starts. This is to avoid expected logistics bottlenecks and allows customers to fix fertilizer prices at current production cost, in order to avoid unplanned surprises during Q1.
Any kind of export ban would seriously infringe EU law, specifically Article 35 TFEU. It cannot be justified by reference to Article 36 TFEU and the related case law of the Court of Justice of the European Union (CJEU).
Nitrogénművek Zrt. wants to assure all its customers and partners that the company will live up to its commitments and do its best to serve the market in Hungary and abroad.