LONDON, Dec 7, 2018 /PRNewswire/ --
A naval clash between Ukraine and Russia November 25 has further strained relations between the countries, with fears that trade could be affected should it become a full-blown crisis.
Ukraine says Russia is deliberately blockading Mariupol and another Ukrainian port on the Sea of Azov, Berdyansk after Russian border guards fired on three Ukrainian ships and seized their crews off the Crimean Peninsula.
Russia and Ukraine share access to the Sea of Azov under a 2003 treaty.
German Chancellor Angela Merkel has suggested "sensible dialogue" will solve the crisis but an escalation in tensions between the two nations could have wide-reaching effects, including on fertilizer trade.
Nitrogen fertilizers impact
Neighbourly disputes over nitrogen fertilizer exports have been around for a decade already with the imposition of duties on Russian ammonium nitrate (AN) by Ukraine on May 21 2008.
Ukrainian anti-dumping duties on Russian nitrogen fertilizers, excluding ammonia, prevail and are set at 31.84% through 2018.
Russia in turn has placed Ukrainian nitrogen facilities belonging to Dimitry Firtash, Ihor Kolomoisky and state-run Sumykhimprom on its sanctions list from early November 2018.
The impact of the Russian sanctions announcement is still unclear, but most believe ammonia trade between Russia and Ukraine will continue in the short term. This is because sanctions do not prevent payment from Ukraine to Russia for ammonia received but will instead block Russian bank accounts and funds owned by Firtash and Kolomoisky.
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