Russia’s Industry and Trade Ministry does not see any need to restrict exports of fertilizers, according to an Interfax report late last week, citing the ministry.
Any restrictions on export shipments of mineral fertilizers mean the loss of competitiveness of Russian products, and consequently risks Russian producers reducing their production, said the ministry.
According to the report, the comments follow recent criticism from the country’s Agriculture Ministry and Russian farmers. Russian farmers are threatening to push for export duties on mineral fertilizers if prices on the domestic market start to increase dramatically.
The Agriculture Ministry also has said it might get involved on deciding the issue of whether to introduce price regulation for mineral fertilizers.
Russia’s Federal Antimonopoly Service (FAS) last week announced that it is investigating the grounds for pricing of mineral fertilizers to the domestic market, and would take “adequate response measures” if there are signs of overpricing (GM Feb. 26, p. 37). The results of the FAS probe are expected in the first 10 days of March.
However, according to the Industry and Trade Ministry, as cited by the Interfax report, Russia’s fertilizer producers are currently fulfilling the conditions of product supplies to the domestic market, which includes provision for preventing dramatic seasonal price fluctuations and keeping domestic prices lower than export prices.
These conditions are regulated by an agreement on cooperation signed in 2012 to meet the requirements of Russian farmers and the country’s agribusiness sector.
The price of potassium chloride for Russian NPK producers, for instance, since 2012 has been based on the minimum export price as per an agreement with the FAS, which was later amended and extended to 2022, according to Uralkali’s 2019 annual report. Since October 2013, potassium chloride prices for Russia’s NPK producers have been calculated on a monthly basis, enabling Uralkali to respond promptly to changes in market conditions, according to the potash producer’s report.
According to the ministry, the difference between the export price and the price on the domestic market is reaching 20 percent and even more.
Uralchem has decided to fix prices for the main groups of mineral fertilizers it supplies to Russian agricultural producers for the entire spring sowing campaign, the company said in a Feb. 26 statement.
“Prices for the company’s product line in the domestic market are already 25-30 percent behind the world average. Despite this, Uralchem has decided to freeze the selling price of ammonium nitrate and other fertilizers produced in March-April 2021 in order to support Russian farmers,” said Uralchem.
In addition, the producer said it would completely fulfil all requirements (orders) of the agro-industrial complex in the regions where it is present, according to an Interfax report, citing the company.