10 Nov 2010 15:42

Khristenko backs idea of free pricing on mineral fertilizer market

PERM. Nov 10 (Interfax) - Russian Industry and Trade Minister Viktor Khristenko has said he supports the principle of free price-setting on the market for mineral fertilizers.

"It is best to move in the direction of free price-setting and subsidizing agricultural producers if need be, rather than taking a long time restraining and supporting artificial pricing," Khristenko told the press. "It seems to me that, in general, we have been able to achieve coordinated construction between producers and consumers of this product [mineral fertilizer]," he said.

A governmental commission chaired by First Deputy Prime Minister Igor Shuvalov discussed late last month the idea of transitioning to the selling of potassium chloride at market prices in Russia. The plan is that producers of it will in 2011-2012 market their product to their Russian buyers at the lowest export price. Starting in 2013, producers of compound fertilizers would be able to count on compensation for additional spending on procuring potassium needed for producing compound fertilizers to be sold in Russia.

At present, the minimum export price for potassium chloride is about 6,300 rubles per tonne.

Russia's Federal Antimonopoly Service (FAS) has already worked out the rules for non-discriminatory access to the Russian market for potassium chloride. They set the potassium price at 4,300 rubles per tonne for compound fertilizer makers in 2010. The idea is that prices will go up on a par with industrial inflation until 2015.