25 Aug 2009 13:25

UralChem and Mineral Fertilizers agree with UralKaly on potassium supply until year

MOSCOW. Aug 25 (Interfax) - OJSC UralChem and OJSC Mineral Fertilizers (Rossosh) have reached an agreement with OJSC UralKaly for the supply of potash chloride at 3,955 rubles a tonne until the end of the current year.

UralChem told Interfax: "an agreement had been made between UralChem and UralKaly for the supply of potash until the end of the 2009 at 3,955 rubles a tonne. The agreement is in the signing stage."

A company spokesperson said that the indicated price was in line with the recommendations of the Ministry of Industry and Trade.

The company also said that an agreement had not been signed with Silvinit as price terms were still being deliberated.

A sector source told Interfax that UralKaly had also agreed to supply potash to Mineral Fertilizers (Rossosh) at 3,955 rubles per tonne. "The agreement with the company has already been signed," the source said.

Russian fertilizer producer Silvinit earlier was the traditional supplier of potash to UralChem and Mineral Fertilizers (Rossosh).

It was earlier reported that UralKaly and Silvinit, Russia's only producers of potash, decided to increase prices by 20% to Russian producers of complex fertilizers.

UralKaly has reached agreements with its main clients, CJSC PhosAgro and OJSC EuroChem. However, Silvinit's customers such as Acron , UralChem and OJSC Mineral Fertilizers (Rossosh) all insisted on maintaining the price that was in effect during the first half of the year.

Following a meeting with the Ministry of Industry and Trade, at which potash producers received a recommendation not to raise their prices to Russian fertilizer producers, UralKaly decided to keep the price at 3,955 rubles per tonne until the end of the year.

Silvinit earlier said that had made a similar offer to its clients, who, in turn, decided against signing contracts. They said that the agreement offered by Silvinit foresees basing prices for domestic users on export prices for potash. On August 20, Silvinit again presented contracts for potash supply to Acron and UralChem, promising to deliver 247,500 tonnes by the end of 2009.