PRESS: Russia may freeze fertilizer prices until May 2022

MOSCOW, Oct 26 (PRIME) -- The Russian government may freeze prices for mineral fertilizers until May 2022, Vedomosti business daily reported on Tuesday quoting sources familiar with the matter.

Earlier in October, the Russian Association of Fertilizer Producers said that the leading members of the association, including PhosAgro, Acron and EuroChem, have agreed to prolong a price freeze until December 31. President Vladimir Putin asked the government to draft measures to restrict the growth of prices for fertilizers that could be caused by higher natural gas prices.

Vedomosti reported that the government discussed freezing the fertilizer prices for at least the spring sowing of 2022 at a Monday meeting chaired by Prime Minister Mikhail Mishustin. A source said that the companies are now signing nitrogen fertilizer contracts ahead of the sowing, but some companies stalled for time as the dynamics of fertilizer prices were unclear.

Another source familiar with the meeting said that nitrogen fertilizers were discussed and the main option was prolongation of the price freeze for ammonia nitrate until May 2022 with a focus on prioritization and guaranteeing of supplies to the Russian regions.

A source close to the fertilizer producers said that several options ranging from market ones to administrative orders were discussed during several government meetings.

The option that was the closest to the market was prolongation of the current principle of fertilizer producers holding prices at a global average less transportation costs, meaning a 20–30% discount to the international prices. Another option was a price freeze at the level of 2021 with adjustment to inflation, or introduction of strict monthly quotas of supplies to the internal market.

An Agricultural Ministry representative said that deficit of energy and higher energy prices in Europe create prerequisites for possible shortage of supply of mineral fertilizers on the Russian market, and that the government discussed the issue.

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