The State Customs Service of Ukraine is massively overestimating the cost of imported fertilizers and delaying their deliveries, UKAB reports

The press service of the "Ukrainian Club of Agrarian Business" association reported on mass appeals from suppliers of mineral fertilizers, who complain about the delay by representatives of the State Customs Service of Ukraine in issuing customs declarations for the import of mineral fertilizers and the refusal to determine the customs value of the goods in accordance with the contract price. Instead, representatives of the State Customs Service determine the value of goods using secondary methods, in particular reserve methods, in order to overestimate the customs value of mineral fertilizers, sometimes using the customs value of non-comparable goods for previous periods to adjust.

"Yes, in many cases of urea supplies, the State Customs Service did not approve the customs declaration at a value lower than $745-805/t, although the importers in the declarations indicated the real value according to the basic method in accordance with the contract price of $600-670/t. Accordingly, as a result of overstating the cost of fertilizers by representatives of the State Customs Service even by $100/t, additional costs for paying 20% VAT and 6.5% import duty amount to $26.5/t. A similar situation has developed with other types of fertilizers," the message reads.

The customs clearance process is complicated by a significant drop in fertilizer prices on world markets. Thus, the exchange value of urea FOB Middle East on February 16 was $358/t, although two months ago it reached $502/t. A similar price trend has developed for other types of fertilizers.

In Ukraine, the price of urea is currently 30-34 thousand UAH/t with VAT, which is equivalent to 680-770 $/t without VAT, but there is also a tendency to lower prices following the world market, with the adjustment of the cost of delivery to Ukraine. This means that new batches of urea at the border will cost $500-550/ton. If the State Customs Service clears fertilizers at an inflated price of $800/ton, importers will receive additional unjustified customs costs of up to $80/ton, which will eventually reduce farmers' income.

Therefore, UKAB called on the government to pay attention to the actions of the State Customs Service, which contain signs of abuse of the cost adjustment mechanism, unjustified overestimation of the import value of goods, and delays in the supply of fertilizers to farmers, necessary for the 2023 sowing campaign.