All Posts from January 3, 2011

Market Watch

AMMONIA

U.S. Gulf/Tampa: January business for Tampa has been concluded at $475/mt DEL, up $15/mt from December. The price was actually up a little more than some had predicted, but apparently Yara had higher numbers in its eyes.

Eastern Cornbelt: On the ammonia front, suppliers reported fielding lots of inquiries last week, but not much business was being done. “We’re selling tons every day, but not big blocks,” said one. “Buyers are just leery.”

Ammonia pricing was pegged in the $670-$680/st range FOB most Illinois terminals, with Indiana terminals quoted at $680-$690/st FOB.

Western Cornbelt: Anhydrous ammonia was unchanged at $640-$660/st FOB regional terminals. Sources said spring prepay tons were being offered in the $615-$620/st range FOB some production points in Oklahoma and Kansas last week.

Numerous sources described year-end fertilizer buying activity as slow. “Farmers are still uncertain about what they’re going to plant,” said one Missouri contact. “They’re buying equipment, seed, chemicals. They’re buying some fertilizer, but they seem to spending their money on other stuff this year.”

California: Anhydrous ammonia pricing remained at $610/st truck-DEL in California, with postings as high as $670-$675/st DEL. Aqua ammonia was steady at $165/st FOB in the state.

Pacific Northwest: The anhydrous ammonia market in the region was quoted in a broad range at year’s end, with rail-delivered tons reportedly available for as low as $640/st on a spot basis. The upper end was quoted at the $715-$720/st truck-DEL mark.

Western Canada: Anhydrous ammonia remained at $817-$825/mt DEL in Manitoba, $825-$834/mt DEL in Saskatchewan, and $834-$861/mt DEL in Alberta. Dealer postings were steady at $827-$871/mt DEL in the region, depending on location.

Several sources said growers were making calls to commit to spring fertilizer tons before the end of the year. One contact said growers in the region are likely to turn to fertilizer-rich crops in 2011, including corn, wheat, and canola, while less nutrient-intensive crops like soybeans and peas will see declines.

Another issue that may continue to impact fertilizer inventories going forward is higher beef prices and improving dairy markets, noted one source. “Ranchers and dairymen are fertilizing their hay crops and pastures at higher rates as they make business investments,” he said. “This might be a big factor.”

UREA

U.S. Gulf: Recent granular barge trades were put in the $378-$383/st FOB range. Overall, sources said the market was quiet over the holidays. Some said they had expected more end-of-the-year buying for nitrogen products.

Eastern Cornbelt: Granular urea was quoted at $425-$445/st FOB regional terminals, with the upper end FOB Maumee, Ohio, and the low reported out of the E. Liverpool, Ohio, market. Dealer pricing FOB Cincinnati was pegged at the $440/st level last week.

Western Cornbelt: The granular urea market was quoted at $410-$440/st FOB for prompt tons, with the low again in southern Missouri and the high quoted in Iowa for reference pricing to the dealer.

California: Granular urea pricing was pegged at $435-$445/st FOB in California, up slightly from last report. Delivered urea postings from Agrium ranged from $490/st to $495/st in the state.

Pacific Northwest: The granular urea market was pegged at $445-$455/st FOB and $460-$490/st DEL in the Pacific Northwest, up slightly from last report.

Western Canada: Urea pricing in Western Canada was unchanged at $551-$576/mt DEL, with the low in Manitoba and the upper end in Alberta. Dealer reference levels fell into the $560-$585/mt DEL range in the region, depending on location.

Pakistan: It now looks as if TCP will handle the importation of 225,000 mt of urea by the end of this month. The Pakistani government agreed in late December to a deal with Saudi Arabia that will bring in the urea under a $100 million grant and loan program.

Pakistan was forced to return to the international market after a new analysis of urea stockpiles showed a shortage of 225,000-250,000 mt from previous estimates.

The original estimates were based on expectations that domestic urea production would return to normal after natural gas diversions in May were reinstated to the industrial sector. The gas, however, remains diverted from industrial into the fourth quarter. The reduction in natural gas supplies to the urea plants prevented the producers from meeting the targets set earlier by the government.

At the beginning of the year, the government hoped to make the country self-sufficient in urea thanks to new production that came online in 2010.

The initial diversion of natural gas, however, forced the importation of 300,000 mt by July 2010. Analysts at that time estimated that no further imports would be needed if the gas supplies were returned to the urea producers. That did not happen.

In early December 2010 new estimates placed the urea shortage at 225-250,000 mt.

The Economic Coordination Committee of the government made it clear that it wanted the urea purchased immediately so material can be put in place by the end of this month.

The quick nature of the purchase, along with changes in the urea market since the last TCP purchase, could give the buyer a serious case of sticker shock.

The price of the urea at the time of the last Pakistan purchase was $287.89/mt CFR for 50,000 mt. The Arab Gulf price was $250-$265/mt FOB.

The current price for granular and prilled urea from the Arab Gulf is now pegged at $380-$390/mt. The last Indian business showed prices at $397-$400/mt CFR.

The Arab Gulf price going into the New Year is $380-$390/mt FOB. With freight of about $20/mt, Pakistan will need about $96 million of the Saudi loan to cover its immediate needs.

Even as the government decided the tons were needed, it was not clear what company would handle the transaction.

Ordinarily TCP would handle the whole deal, but a recent set of scandals and miscues on imports of other commodities led the cabinet to invite the private sector to participate.

The State Bank of Pakistan was a strong proponent of using TCP despite its problems.

In the end, sources report the private companies quietly approached by other government agencies declined to get involved.

One trader said the whole issue boiled down to uncertainty over how and how soon the company would be compensated for the difference between the import price and the price for the farmers.

The subsidy set-aside for this deal, according to local media, is about US$70 million.

Cash-strapped Pakistan has benefited from similar Saudi grants and loans in the past to ensure sufficient urea stockpiles.

When rumors of the purchase first surfaced, sources speculated Sabic might offer Pakistan a slight discount. The amount of urea asked for and the loan/grant amount argue that Sabic has no intention of reducing its price.

The urea supply position on the domestic front will remain tight in coming months due to the delay in the start of Engro’s new 1.2 million mt plant, which is being commissioned by E&P contractor Snamprogetti at a cost of over US$1 billion in Sindh Province. The company announced commencement of trial production in December, but had to postpone it due to gas curtailment and gas load shedding in Jan./Feb. 2011. Engro Corporation, the holding company of Engro Fertilizers Ltd., informed the Karachi Stock Exchange on Dec 27, 2010, that the government’s decision to continue 20 percent curtailment of gas supply and 45 days closure of all urea factories effective Jan. 7, 2011, will affect its old facilities as well as commissioning of its new urea plant.

As a consequence, to offset the impact of capacity and efficiency losses caused due to the curtailment of gas, the price of Engro’s urea has been increased appropriately. However, Engro pointed out that the price of urea in the local market still remains at around half the price of imported urea. Engro reportedly increased the price by Rs190 per bag, to Rs1,020 per bag of 50 kgs.

An analyst of InvestCap pointed out that Engro is going through a crucial time as its plant is in the start-up phase, and trial production is expected to start in early 2011 – if all goes well. The delay in commissioning has also resulted in cost overruns for the project, to the tune of approximately US$10 million a month. In this manner, the recent increase in urea prices is expected to address liquidity concerns of the company amid cost overruns and gas curtailment.

India: Rumors keep coming that there will soon be a tender. Asian sources say demand is strong enough that more urea will have to be purchased before the season ends.

Others say, however, that the congestion at the ports in India pretty much ensures that no new purchases will be made until at least late February. Other sources say March or April will be the most likely time when the Indian buyers return to the market. One source noted that waiting until after April 1, when the new fiscal year begins, would make the most sense.

The Indian government is looking at ways to reduce its outlays for urea.

Besides the cost of importing the product, the government also provides a subsidy that covers the difference between what the urea costs and the maximum price set for the farmers. Cabinet-level meetings have been taking place for more than a month now to review and revise the urea subsidy and buying programs.

A number of plans have been laid on the table. The most controversial is to remove the price limits on urea completely. The treasury ministry is particularly fond of this idea.

Modified versions of price increases and scaled subsidies have also been discussed.

Of particular interest to the international urea community are the discussions about what companies will be allowed to import the product. For now only MMTC, STC, and IPL are allowed to import urea for direct application. Some private firms import urea for NPK production.

One of the plans under discussion would allow some private sector companies to import urea in competition with the three state-owned entities.

With so much up in the air, one source said it makes more sense to wait until the new urea purchase plan is in place before calling any new tenders.

Middle East: Sabic will claim another good month now that the governments of Pakistan and Saudi Arabia reached an accord on the purchase of 225,000 mt of urea through TCP.

Pakistan wants the tons delivered by the end of this month. To meet this kind of deadline, Sabic will have to ship most of its January production.

For the producer, this deal works out fine. Sources have said that January and February could be slow months for the Middle East producers.

The contracts they carry usually call for reduced shipments in the first couple of months of the year. Loadings pick up in late February as estimates for North American demand are firmed up.

Vessels from the Middle East are reportedly moving smartly into New Orleans for storage and spring shipment up the river.

Sources report that Egyptian urea has settled at $410/mt FOB. Following the usual formula of difference between Egypt and the Arab Gulf, that should put the AG price in the $420s/mt FOB, but without a public deal to confirm that level, sources say the Arab Gulf market hovers just under $400/mt FOB.

The Pakistan purchase price will tell a lot about how the market is moving.

If the government uses the whole $100 million for the 225,000 mt, that would put the price at $445/mt CFR. Once the $20/mt freight is backed off, the netback would easily fit in with a formula price derived from the Egyptian deal.

Black Sea: The market appears to have stabilized around $380/mt FOB.

In mid-December sources pegged the market in the $370s/mt FOB. By the end of the year, however, the price seems to have moved comfortably into the low $380s/mt FOB.

Propping up the market is strong demand from Turkey and reduced production. Sources say inputs – notably natural gas – are being diverted for consumer use as the heart of winter approaches.

Demand from Central and South Americas has also helped keep reserves down.

Bangladesh: The import of urea to Bangladesh suffered due to the hijacking of a urea-laden vessel – Thor Nexus, a Thai ship – by Somali pirates on Saturday, Dec. 25. She was carrying 15,750 mt of urea to BCIC. According to the local agent of the Thai bulk carrier, urea was loaded into the ship at Al Jubail of Saudi Arabia and was to reach Chittagong Dec. 30. Majharul Hoque, deputy manager of BCIC’s Chittagong Region, told media the shipment was part of a deal between Saudi Arabia and Bangladesh. The Saudi government agreed to deliver 100,000 mt of urea, and this consignment was to be the final one.

At least 27 crew are aboard the ship, which was captured by pirates in the Arabian Sea. The owner of the ship is negotiating with the pirates for the release of the ship and its sailors. According to maritime watchdog Ecoterra International, Somali pirates are currently holding at least 40 foreign vessels and nearly 700 seamen, though the European naval force in the area put it at 25 vessels and 601 hostages.

In the meantime, another import of urea to Bangladesh is delayed over a legal dispute.

According to Chittagong Port Authorities (CPA), the Indian ship MV Ocean Pearl was detained at Patenga on Dec. 21 after the court issued an “arrest order” against it over an admiralty suit filed by the supplier of the cargo on board claiming a compensation of over Taka 190 million (US$2.7 million) for alleged loss of some cargo. An official of Sigma Shipping Ltd., the local agent of the vessel’s owner, told local media that the supplier, Desh Trading Corp., filed the suit, adding that the supplier claimed compensation for shortage and loss of cargo carried by the ship.

The ship was scheduled to call at Mongla port to unload the cargo, but the ship developed cracks and made an emergency beaching on the Patenga coast. As it failed to reach the destination in time, some cargoes were damaged, he said. The ship carried over 16,000 mt of urea from China for BCIC.

Separately, the Department of Environment in Chittagong has also served a show cause notice to Sigma Shipping, the local agent of the ship, for spilling oil along the coastline, officials said.

NITROGEN SOLUTIONS

U.S.Gulf: Players last week were putting the barge market at $280-$285/st FOB ($8.75-$8.91/unit).

Eastern Cornbelt: The UAN market was quoted in the $10.65-$10.70/unit FOB range out of river terminals in the Eastern Cornbelt region, and up to $11.05/unit FOB Ohio inland points for prompt pull. Those numbers were up slightly from last report.

Western Cornbelt: UAN-32 was tagged at $325-$340.80/st ($10.16-$10.65/unit) FOB regional terminals, with the low quoted in southern Missouri and the upper end in the Iowa market.

California: The UAN-32 market had reportedly firmed to $345-$360/st ($10.78-$11.25/unit) FOB in California, depending on location and supplier. Reference prices for delivered UAN-32 included $375/st ($11.72/unit) truck-DEL in Central California and $380/st ($11.88/unit) truck-DEL in Northern California.

Pacific Northwest: Sources tagged the UAN-32 market at $360-$370/st ($11.25-$11.56/unit) DEL in the Pacific Northwest. IRM moved its UAN-32 posting on Dec. 8 to $370/st ($11.56/unit) DEL in Eastern Oregon and Washington.

Western Canada: UAN-28 prices had reportedly inched up to $337-$352/mt ($12.04-$12.57/unit) DEL in Western Canada, with the low again reported in Manitoba and the upper end of the range in Alberta.

AMMONIUM NITRATE

U.S. Gulf: Barges continued to be called $320-$323/st FOB.

Western Cornbelt: Ammonium nitrate remained at $360-$385/st FOB in the region, with the upper end in the Iowa market.

California: No market was reported for ammonium nitrate in California. The CAN-17 market, however, was quoted at $262-$272/st FOB last week. Yara was slated to move its CAN- 17 reference price to the $265/st FOB mark on Jan. 1.

Pacific Northwest: Ammonium nitrate pricing had firmed to $398/st rail-DEL in western Montana and $423/st DEL to points in northwestern Washington. No current pricing was reported for CAN-17.

AMMONIUM SULFATE

Eastern Cornbelt: The granular ammonium sulfate market was pegged at a solid $275-$290/st FOB in the region for any available tons, with the low at E. Liverpool. Inventories remained very tight, however.

Western Cornbelt: Granular ammonium sulfate was pegged at $280-$290/st FOB, and remained in very tight supply in the region. Missouri sources said spot prices that were previously at the $260-$270/st FOB level had firmed in late December.

California: Sources quoted the ammonium sulfate market in a broad range at $245-$275/st FOB, depending on grade and supplier. Those numbers were up from last report, with the upper end reflecting IRM’s Dec. 17 posting for regular grade ammonium sulfate FOB Chico. IRM’s fluid grade ammonium sulfate postings moved on that date to $250/st FOB Sacramento and $255/st FOB Chico. Yara had reportedly moved its standard grade ammonium sulfate posting up $20/st to the $250/st FOB mark.

Pacific Northwest: Ammonium sulfate remained in very tight supply, and spot prices were up in the region. Sources quoted the granular ammonium sulfate market at $305-$310/st DEL, up $35-$50/st from last report. IRM moved its granular and regular grade ammonium sulfate prices on Dec. 17 to $305/st FOB and $310/st DEL in Oregon, Washington, Idaho, and Montana. Fluid grade ammonium sulfate postings from the company moved on that date to $285/st FOB and $290/st DEL in those four states.

Western Canada: Granular ammonium sulfate pricing in Western Canada was up another $20/mt from last report at $370-$375/mt DEL. Product was in tight supply in the region.

PHOSPHATES

Central Florida: Extreme cold blew through and blanketed much of the eastern seaboard with ice and snow last week, creating transportation problems for all but the hardiest of sleigh teams.

For most of the eastern states the world was on holiday anyway, but it was more of a problem in Florida, which produces the bulk of the nation’s winter crops. Citrus, strawberries, and produce suffered damage, although official reports were still pending. Heavy pumping by strawberry farmers, who coat their crop with ice during freezing weather to reduce damage, was suspected of being responsible for creating a sinkhole near a Tampa garbage dump that was about 80 feet deep and threatened to contaminate groundwater. Tests were being conducted.

With no new prompt sales last week, the Central Florida DAP price range was unchanged from the previous week at $540-$550/st FOB. Smaller lots from traders could cost $5-$10/st FOB more. CF’s price was $540/st FOB. Mosaic’s price was $550/st FOB. MAP was listed at a premium of $10/st FOB in comparison to DAP. PCS Sales was making sales at comparable prices to the market. Agrifos’ price for truck sales was $580/st FOB for DAP and $595/st FOB for MAP, but was $5/st FOB less for rail.

U.S. Gulf: Most people in the industry apparently found a way to take the holidays off, and the few who remained to staff the virtually empty offices were just plain bored. One said traders were using the “I’m bored” approach as a sales tool, just to find something to do. For the most part that didn’t work, but a few sales of NOLA DAP barges and a couple of MAP railcars were made – just enough to barely change the NOLA DAP barge range.

Meanwhile, a blizzard slammed into the eastern areas of the Cornbelt and the eastern U.S., and some may not have been able to get to the office even if they really wanted to – which few did.

Although farmers were mostly snug in their beds, crop prices grew, so doing nothing can pay off at times. Last week, corn for December 2011 improved from $5.36/bushel to $5.55/bushel, and December 2012 bounced up from $4.979/bushel to $5.15/bushel. Soybeans for November 2011 were up from $12.1675/bushel to $12.9375/bushel, while November 2012 soybeans were running $12.155/bushel. Wheat for July 2011 regrouped after falling to $7.995/bushel the previous period to $8.285/bushel early last week, while July 2012 moved up to $8.25/bushel.

Estimates for corn planting in the spring were running as high as 93 million acres, but even if that turns out to be overly optimistic it will be more than last year. More acres of corn mean more phosphate will be used, and combined with low inventories, probably higher prices as well.

The NOLA DAP barge market range drifted south from the previous week’s range of a flat $550/st FOB last week to $545-$547/st FOB, based on actual barges sold. MAP was bringing a premium of $20/st FOB for NOLA barges. Prices will probably be firm or higher for the next month or so. Once the spring season starts, the trend should be up, not down.

Eastern Cornbelt: DAP was quoted in the $600-$625/st FOB range, with the low reported by Illinois sources out of river locations and the upper end to dealers FOB Maumee. The E. Liverpool DAP market was pegged at the $610/st FOB mark at midweek. MAP was $10/st higher than DAP, where available.

10-34-0 remained in very tight supply. Ohio sources tagged the market at a reference price of $525/st FOB, but said nothing was for sale at that level. In Illinois, sources quoted spot tons for as high as $580/st FOB last week.

Western Cornbelt: DAP was quoted at the $585-$600/st range FOB regional warehouses, with the low in southern Missouri and the upper end in the Iowa market to the dealer. MAP was $605-$620/st FOB, where available. 10-34-0 remained at $560-$580/st FOB for very limited tonnage, with the upper end quoted in Iowa on a spot basis.

Effective Jan. 1, Agrium’s phosphoric acid postings firmed to $1,250/st rail-DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA) in Colorado, Iowa, Kansas, Minnesota, Nebraska, New Mexico, North Dakota, South Dakota, Oklahoma, Texas, and Wyoming.

California: The DAP and MAP markets were steady at $645-$650/st FOB or DEL in California. 16-20-0 pricing, however, had reportedly firmed some $20/st to $431-$436/st FOB Lathrop, and $438-$443/st FOB warehouses in Northern California.

Phosphoric acid prices from Simplot firmed on Jan. 1 to $11.40/unit DEL for both SPA and MGA, with MGA postings out of regional warehouses moving to $11.60/unit FOB. Those levels were up 40 cents/unit from December prices. Agrium published a larger increase, moving its SPA and MGA postings on Jan. 1 to $1,250/st rail-DEL in California and Arizona, up from December pricing levels of $1,100/st rail-DEL.

As a result of the phos acid increase, 10-34-0 pricing from Simplot firmed on Jan. 1 to $482-$492/st FOB Helm. The company’s 11-37-0 posting out of El Centro went up $20/st to $535-$545/st FOB.

Pacific Northwest: DAP and MAP remained at $635-$645/st FOB or DEL in the region, with the low in Montana and the upper end in Washington. The 16-20-0 market had reportedly firmed to $418-$428/st DEL in the region, with the low in Idaho and Montana.

Simplot’s January reference prices for phosphoric acid firmed to $11.40/unit DEL for both SPA and MGA in the region, with the FOB price at $10.90/unit FOB Pocatello. Agrium’s phos acid postings firmed on Jan. 1 to $1,250/st rail-DEL for both SPA and MGA in Idaho, Montana, Nevada, Oregon, Utah, and Washington.

10-34-0 was quoted at a solid $495/st FOB in Washington, and remained in tight supply. 11-37-0 pricing from Simplot had reportedly firmed to $545-$555/st FOB in the region, up $25/st from last report.

Western Canada: MAP was steady at $737-$742/mt DEL in Manitoba, $742-$752/mt DEL in Saskatchewan, and $747-$772/mt DEL in Alberta, with dealer postings ranging from $740-$775/mt DEL in the region. 10-34-0 was in very tight supply in the region. Sources reported no current prices last week.

U.S. Export: No export phosphate deals were found last week – at least not by anyone who showed up at work over the holidays.

Low inventories in the U.S. have been largely responsible for a lack of sales, especially combined with higher domestic prices, which equals a lack of motivation on behalf of sellers.

During the next several months, phosphate exports have the opportunity to grow, considering China’s essential withdrawal from the market with its 110 percent export tariff of phosphates. If prices in the U.S. decline, producers and traders will take aim at the export market – especially if international prices rise.

With no new sales last week, the export DAP price range did not move from the flat $600/mt FOB in the several previous reports.

Pakistan: The Pakistan National Fertilizer Development Centre (NFDC) in its recent report said DAP availability appears to be comfortable in Rabi 2010-11 (Oct.-March), which started with 405,000 mt of DAP. Domestic production estimates are 324,000 mt. Total DAP imports so far made by private importers are 88,000 mt. Another 30,000 mt was expected to arrive by the end of December.

POTASH

Eastern Cornbelt: Potash was quoted at $505-$525/st FOB regional warehouses, depending on grade, supplier, and location. Most sources put the red granular potash market at the $515/st FOB level in the region.

Western Cornbelt: Potash was reported at $495-$515/st FOB in the region in late December, with the low out of river locations in southern Missouri on a spot basis.

California: Potash remained at $545-$558/st DEL, depending on grade and supplier. Potassium nitrate was steady as well at $929-$996/st FOB, with the low for bulk tons and the upper end for bagged product.

Sulfate of potash (SOP) had reportedly firmed to $690-$715/st FOB for bulk tons, depending on supplier, up some $25-$35/st from last report. Great Salt Lake Minerals Corp., a subsidiary of Compass Minerals, announced a $25/st increase on all SOP orders placed on or after Dec. 13, or as contracts allow. The increase applies to both standard and granulated products, the company said.

Pacific Northwest: Potash was steady $525-$535/st FOB and $535-$545/st DEL in the Pacific Northwest region.

Western Canada: Potash remained at $542-$551/mt FOB Saskatchewan mines to Canadian customers, with the low for 60 percent and the upper end for 62 percent muriate. Out of regional warehouses, the potash market was steady at $557- $582/mt FOB, depending on grade and location.

SULFUR

Tampa: The New Year rolled around this week and with it the beginning of the first quarter, but no mention or whisper of a start to negotiations for first quarter sulfur prices for molten to Tampa. Talks, discussions, or negotiations would be difficult with no one on either side available. A new price will probably not come until sometime toward the end of the month.

No one had a really good guess on what prices will do, except it was doubtful they would take a nosedive. Despite some slight easing along the Gulf Coast due to barely improved refinery rates in the past month and concentration on producing fuel oil for heating, supplies were still extremely tight – and that was not likely to change in the near term. Refinery rates in the last available report fell a tad, from 88 percent to 87.7 percent, a 0.7 percent decrease.

Russia: Russia’s Uralkali reports that it has signed agreements with compound fertilizer producers JSC Acron and JSC Dorogobuzh (members of Acron Group) to supply muriate of potash (MOP) linked to the minimum export price. The agreements are made in compliance with the Non-Discrimination Access to MOP Acquisition Rules and will be valid from Jan. 1, 2011 to Jan. 1, 2014. In 2011, Uralkali will supply 300,000 mt of MOP to Acron and 150,000 mt to Dorogobuzh. Subject to options, the total amount of supplies may reach 315,000 mt and 157,500 mt, respectively.

Uralkali said it has been informed that Silvinit has entered into agreements with JSC Minudobreniya (Rossosh) and JSC Acron about supplies of MOP in 2011-2013. According to contacts, in 2011 Silvinit will supply 301,500 mt to Minudobrenaya and 16,000 mt to Acron.

In November 2010, the Federal Antimonopoly Service of Russia distributed the Non-Discrimination Access to MOP Acquisition Rules to mineral fertilizer producers. Under the Rules, from Jan. 1, 2011 to Jan. 1, 2013, MOP producers are advised to supply their products to Russian compound fertilizer producers at the minimum export price, with its level to be adjusted every quarter. In first quarter 2011, subject to a number of discounts, the minimum export price will be around 5,700 roubles per mt (FCA, net of VAT, unpackaged).

The agreements provide for premiums on a portion of supplies from Jan. 1, 2011 to Jan. 1, 2013, to support Russian agricultural producers. The mechanism of premiums will allow compound fertilizer producers to buy potash to produce fertilizers for the domestic market on the same preferential terms that apply to agricultural producers. The structure is designed to encourage the growth of compound fertilizer supplies to the domestic market.

Uralkali previously announced the signing of long-term agreements with Eurochem and PhosAgro. Silvinit previously announced the signing of long-term agreements with Uralchem, Eurochem, PhosAgro, and Meleuzovskiye Mineral Fertilizers. Thus, Uralkali and Silvinit have signed agreements with all major Russian NPK producers under the Non-Discrimination Access to MOP Acquisition Rules. The company said needs of these companies, and also of the Russian agricultural manufacturers for MOP in 2011 will be completely satisfied.