When all is well
The production of mineral fertilizers is one of the few segments of the domestic industry, which grows over the past ten years. On the one hand, the needs of agricultural producers grow. And on the other, the global conjuncture pushes: the supply of Russian hydrocarbon raw materials outside the country is reduced. According to Valentina Kolodian, commercial director of the Research and Design Institute of Carbamide, in the first quarter of 2020, the supply of Gazprom to the European gas market decreased by 24.2%, Turkey in March imported less than Russian gas than in 2019, and Russian sales Gas to Germany decreased by 45% during the same time. Another expert, Irina Kuchgina from ArgusMedia, also binds the growth of the Russian fertilizer market over the past years with the situation in the agricultural market. So, sowing areas on which mineral fertilizers are used, have grown over the past twenty years from 27 to 61%.
The data of the Russian Association of Fertilizer Manufacturers (RAPU) also testifies to the favorable conjuncture. According to the Association, Russian manufacturers of mineral fertilizers in 2020 increased the supply of products to the domestic market by 20.4% to 11.5 million tons (in physical weight). And Russia's Ministry of Agriculture also noted that Rapipi enterprises fully ensured not only the claimed, but also the corrected amount of acquisition of mineral fertilizers. Thus, an increase in the demand for mineral fertilizers from 3.8 to 4.5 million tons D.V., declared by the Ministry of Agriculture of Russia in February of the current year. Manufacturers did not cause anxiety. This need will be satisfied in full, noted Maxim Kuznetsov, the executive director of the ramp, referring to such a successful solution of similar situations in the past.
However, agricultural producers from different regions of Russia in February and March increasingly reported problems with fertilizer purchases.
Correction, greed or inconsistency?
About problems with the purchase of fertilizers this year reported the agrarians of the Krasnoyarsk Territory, Chelyabinsk, Amur and other areas. When such appeals became too much, a special meeting was collected on this occasion from the first deputy head of the Ministry of Agriculture of Jambulat Khatov.Manufacturers of fertilizers within the framework of the discussion noted that the problem is not so significant and will be promptly solved. Moreover, they were notified about the growth of the needs of them just the other day. Such an opinion sounded: the questions arose only in those agricultural producers who did not procure the procurement in advance, for example, did not conclude contracts in the fall.
Agricultural producers in response reasonably noted that it was not so much in terms of contracts and supply volumes, as in prices. Prices of the end of 2020 and February 2021 in February differ in different types of fertilizers by 20%. As the novel of Nekrasov, director of the plant of crop production, mechanization, chemicalization and protection of plants in his speech at the online conference "Crop on the start of the sowing", the most common fertilizer is an ammonium nitrate - rose around 7% in February in respect of January 2021. And many agricultural producers directly indicate that fertilizer manufacturers simply do not want to sell fertilizers at a lower price, counting on further growth.
Actually, fertilizer manufacturers indirectly confirmed this assumption, stating some correction of the market after the price reduction in the period 2019-2020 and "Recovery Growth". However, agricultural producers did not suit such an explanation. And they followed the appeal to the Federal Antimonopoly Service (FAS) with a request to verify the validity of the rise in prices for mineral fertilizers. FAS began checking on the facts of overstating prices for mineral fertilizers, the results of which and subsequent actions of the service will be known in the first decade of March.
Have a negotiate
Part of the experts of the agrarian market believe that the situation with mineral fertilizers should not be given to such a serious meaning. First of all, because the deficit detected is not so significant. In the regions, it averages 5%. And this missing volume when an agreement is reached at prices, it can be quickly replenished. Moreover, the Ministry of Industry and Commissioner has already been reported: the stated volumes were performed for January-February 2021 in the amount of more than 1 million tons in the active substances.
Agricultural producers, in turn, suggest that the problem requires two solutions at once: promptly (before the start of spring field work) and more fundamentally (for example, entering the price regulation of mineral fertilizers in the country). In any case, to negotiate. Perhaps the main factor that will push to a speedy compromise will be global trends. Competition in the global market is growing, demand is gradually reduced, and without additional support measures to Russian producers will be difficult to maintain their current share. The domestic market, on the contrary, is saturated, according to optimistic forecasts, only two-thirds. In absolute indicators, according to the estimates of the Ministry of Agriculture, the volume of making mineral fertilizers by all agricultural producers, including individual entrepreneurs, has reached 48 kg / ha. And the norm recommended by the Ministry of Agriculture is 70 kg of fertilizers per hectare. You can safely predict the extension of sales volumes in the coming years. According to the forecasts of the Ministry of Agriculture, by 2024 the need for domestic agricultural producers in mineral fertilizers will increase to 8 million tons, that is, 2.16 times.
It is unlikely to exacerbate relations with those who are and will be your partner for the coming years.
And one more observation. Problem situations that arise in the agrarian market of Russia clearly demonstrate the incomprehension of the interests of individual players. Balancing of multidirectional interests usually occurs at the government level. Will they be resolved this time, we will see very soon.
Larisa Yuzhaninova
In the preparation of the article used data of the Ministry of Agriculture of the Russian Federation, Rapu, ArgusMedia