July 31, 2012
Russia's fertiliser producers face sharp fall in India
Due to the devaluation of the rupee and a fall of government subsidies to farmers, Russian fertiliser producers faced a dramatic fall in demand on the Indian market.
According to the CRU analysis agency, the rupee to dollar exchange rate fell 24% in 2011. Companies importing fertilisers hiked prices 90% for diammonium phosphate and by more than 2.5 times for potassium chloride to maintain their margins.
India's Ministry of Chemicals and Fertilisers said that demand for potash and phosphate fertilisers was expected to fall 28% in 2012.
The united Russiaa€"Belarus potash trader Belarusian Potash Company has a contract with an Indian importer and continues to supply fertilisers even though the contract ended in March. Raiffeisenbank analyst Konstantin Yuminov said that the Indian customer will be able to pay for all products only by September.
Oleg Petrov, sales and marketing director at Uralkali, one of the owners of the venture, said that negotiations on a new contract may begin in August. The Indian potash fertiliser market is likely to shrink to four million tonnes in 2012 from six million tonnes in 2008.
Petrov said that the consumption of fertilisersin India grew due to high prices for agricultural produce and that would help demand recover.