INTERVIEW: Russia may launch fertilizer exchange trading in 2017

MOSCOW, Dec 28 (PRIME) -- Russia’s Federal Antimonopoly Service is considering starting fertilizer trading on a commodities exchange in a pilot mode in September–November 2017 and in a regular mode until 2018, Deputy Director of the authority Andrei Tsyganov told PRIME in an interview published on Wednesday.

“We want to build a system of mineral fertilizer trading via Russian exchanges or at least to carry out pilot sessions during the autumn’s peak demand in 2017 when reserves for the next year are formed,” Tsyganov said.

He said that fertilizer prices are not increasing and in some cases, they have not grown at all during the crisis which is why this infrastructure is necessary.

The official said that the Moscow Exchange, as well as the St. Petersburg exchange or any suitable commodities market can host the sessions.

Potash fertilizers are produced only by Uralkali but the company is believed to enter the market because the number of potash fertilizer makers can increase to three when new projects are launched. Belarusian Belaruskali can become Uralkali’s competitor in future as well.

The apatite concentrate made by PhosAgro is expected to stay out of market trade. The antitrust can adjust its pricing rules for the substance, Tsyganov said.

Russia can simplify exports of fertilizers bought on the exchange, he said.

GRAIN

The official separately said that the Russian authorities must not stipulate terms a grain duty by law but must retain tools to control the grain market.

The Russian grain export duty was introduced in February 2015 in order to stabilize the market; it was cancelled for the period between September 23, 2016 and July 1, 2018. Market experts said that state intervention mechanisms are still unpredictable and must be regulated by law.

Tsyganov said, “We cannot talk about severe legislative rules, that when prices are at a certain level we must lift duties, close the market, introduce licensing or set quotas. The market of grain and other agricultural goods in many respects depends on the weather and natural conditions, and many other factors.”

Fish and fish product prices are growing without a reason because of a large number of intermediaries and resellers, who do not create added value. Tsyganov said that efforts of law enforcement authorities are needed to stop the unjustified price rise, and also stop production of faked products “when something indescribable is sold under the disguise of valuable fish products.”

“These markets are competitive enough and in many cases, we are talking about administrative or criminal violations rather than market participants’ actions breaking the competition.”

Tsyganov said that the next meeting of the government’s commission for foreign investment can be held in January, and that eight deals will be under consideration.

“I can note an increase of investment in the Russian economy from the East – these are investments from China, Japan, Singapore, India and Korea. At the same time, Western companies are still interested. We have considered petitions of German, French and American companies,” he said.

An acquisition of a 10% stake in petrochemical company Sibur by China’s Silk Road Fund (SRF) can require clearance by the commission because SRF is controlled by the Chinese government. “We know for sure that Sibur has fully answered our questions and we will be able to analyze the information soon.”

End