Uralchem, JSC and PJSC Uralkali decided to fix prices for the main groups of mineral fertilizers for Russian agricultural producers for the entire period of the autumn field work of the 2021 season. The decision was made after consultations with the Ministry of Industry and Trade of Russia.
Realizing the importance of its products for Russian agriculture during the autumn field work, the company decided to freeze its fertilizers prices at the level of May 2021. In the first 5 months of 2021, the selling price for Uralkali's products increased by 15%, while the volume of shipments to the domestic market grew up too. The companies decided to freeze prices for this type of product at the level of May 2021. This means that in 2021 the cumulative rise in potash prices for agricultural producers will be 15%. In 2021, we commit to provide agricultural producers with fertilizers in the amount at least equal to the amount supplied in 2020. We will also provide all the necessary amount of products to producers of complex fertilizers in accordance with the FAS price recommendations.
In 2021, 80% of the ammonium nitrate produced by Uralchem was supplied to the Russian market. In the first 5 months of this year, the prices for this product for domestic agricultural producers grew up by 25%. At the same time, the volume of shipments increased by 10% YoY. The company commits to freeze prices at the level of May 2021 until the end of the autumn field work and ensure the delivery of products in the amount at least equal to supplies of 2020. This means that the cumulative rise in prices for ammonium nitrate will not exceed 25-30% on an annualized basis.
In addition, at the beginning of the current season Uralchem and Uralkali have already come up with a social initiative to freeze fertilizer prices at the time of peak demand in the regions of their operation and have implemented it in full.
In the first 5 months of 2021, Uralchem and Uralkali supplied more than 1.1 million ton of various mineral fertilizers to the Russian market, which is almost 10% more than in the same period a year earlier. The companies are responsible fertilizer producers.
To provide additional support to domestic agricultural producers, Uralchem is opening a hotline. It will be used for prompt notification and communication with Russian farmers, as well as coordination of volumes and prices of supplies during the autumn field work.
Dmitry Konyaev, Chairman of the Board of Directors of Uralchem, JSC, said:
“Realizing all social responsibility, Uralchem and Uralkali are now coming up with a new initiative to freeze again prices for the autumn and to ensure the supply of mineral fertilizers for this time in the amount no less than in the previous period. We made this decision after consultations with the Ministry of Industry and Trade of Russia. At the same time, we want to be responsible for the decisions and the chosen course before the Government of the Russian Federation without intermediaries and additional approvals. In this regard, Uralchem and Uralkali today announce the termination of their membership in the RFPA (Russian Fertilizers Producers Association). This step is due to the fact that in the current difficult situation, it is very hard to develop and agree with all members of the RFPA a common position. Undoubtedly, Uralchem and Uralkali are and will continue working in close cooperation with the Ministry of Industry and Trade, the Ministry of Agriculture, and the Ministry of Economic Development of the Russian Federation to provide Russian farmers with mineral fertilizers."
In the near future, the necessary documents and official notifications on these decisions will be sent to the Ministry of Industry and Trade and the Ministry of Agriculture. Uralchem and Uralkali remain socially responsible companies and will continue taking into account the agreements reached earlier on providing the Russian market with mineral fertilizers.