Experts from the Antimonopoly Agency under the Government of Tajikistan claim that the rise in farm produce prices in Tajikistan has resulted from ‘dry spring’ and rising cost of imported mineral fertilizers in the country.
Speaking to reporters in Dushanbe, Saidali Zarifzoda, an official with the Antimonopoly Agency, claimed on July 13 that “Spring this year was dry and this affected harvests of potatoes and other agricultural goods.”
Besides, prices for the imported mineral fertilizers have increased due to the increased demand for them in the world, he said.
According to Zarifzoda, an average price for one ton of mineral fertilizers over the first six months of this year has been 333.00 U.S. dollars, which is 131.00 U.S. dollars more than in the same period last year.
He further noted that Uzbekistan has provided the bulk of Tajikistan’s mineral fertilizers imports over the reporting period.
Over the same six-month period, Uzbekistan has reportedly supplied 87,000 tons of mineral fertilizers to Tajikistan, which was 56 percent fewer than in January-June last year.
The mineral fertilizers being imported from neighboring Uzbekistan have risen 65.5 percent in prices.
“Tajikistan now does not produce mineral fertilizers, the Antimonopoly agency official added.
The local debt-ridden and loss-making fertilizer plant, OJSC Azot, has not been in operation since 2008 due to lack of natural gas supplies.
The new owner of OJSC Azot (formerly TojikAzot) is Osiyo Chemical Company, which according to some sources may be an affiliate of one of the country’s largest companies – among them are called Faroz and Avesta Group.
Until 2008, when neighboring Uzbekistan upped the price of natural gas, a key input for the factory, TojikAzot served as a foreign investment-success story for Tajikistan’s economy.
TojikAzot was partly state owned, with the government controlling a 20 percent stake in the troubled enterprise. Ostark Ventures Limited (Ukrainian oligarch Dmitry Firtash is beneficial owner of Ostark Ventures Limited) assumed the 75% ownership interest in the enterprise and Khairullo Saidov, the son of ex-Minister of Industry Zayd Saidov, owned 5 percent of shares in TojikAzot.
On June 24, 2014, the Khatlon Economic Court invalidated the transaction for the sale of TojikAzot.
Tajikistan’s Agency for State Financial Control and Combating Corruption in March 2014 announced an investigation into a 2002 deal between Dmitry Firtash and the Tajik government to create TojikAzot, a plant specializing in the production of urea, an organic compound used in fertilizer. The anticorruption agency accused Firtash of illegal privatization of the company in 2002 and misappropriation of funds.
Firtash was arrested in Vienna on March 12, 2014, and released on a 125 million Euro bail two days later
Following Firtash’s arrest, Tajikistan’s anticorruption agency charged him on March 15 with the illegal privatization of the clothing factory Guliston in 2002.
The anticorruption agency has argued that Zayd Saidov was involved in the fraudulent privatization of Guliston and TojikAzot.
On December 14, 2016, the Majlisi Namoyandagon (Tajikistan’s lower house of parliament) voted for ratification of an investment agreement signed between the Government of Tajikistan and China’s Henan Zhongya Holding Group on September 3, 2016.
Under this agreement, the Chinese company owned 50%+1 shares of the enterprise for the first ten years and then it was supposed to transfer this package of shares to Tajikistan.
Henan Zhongya Holding Group had been committed to invest US$360 million in modernization of coal-powered technological equipment and construction of new shops for production of urea and ammonia in Tajikistan within the next three years. However, the construction works have not been begun.
In August 2019, Tajikistan formally revoked a contract with Henan Zhongya Holding Group, accusing it of failing to fulfill the contract and a full package of shares of OJSC Azot was put out to an investment tender.
The State Committee on Investment and State-owned Property Management (GosKomInvest) said in June 2019 that 350 million U.S. dollars are needed for modernization of this plant. The modernization of the enterprise is expected to increase its annual capacity to 1.6 million tons and the enterprise will be able to export up to 1.3 million tons of mineral fertilizers to the neighboring countries per year.
Tajikistan’s current requirements in mineral fertilizers are reportedly 180,000 tons.
