Our major domestic consumers are traditionally producers of compound (NPK) fertilisers. We supplied them with 1.91 million tonnes of potash, 8% more than the previous year
In the Russian market, potassium chloride (KCl) is mainly used as a raw material in compound (NPK) and mixed fertilisers and other chemical products, as a component of drilling fluids in the petroleum extraction sector, and as a singlecomponent fertiliser for direct application to the soil. Potassium chloride is also used in small amounts in the non-ferrous metals industry and the food industry.
In 2016, domestic sales amounted to 2.25 million tonnes, 10% higher than in 2015.
Our major domestic consumers are traditionally producers of compound (NPK) fertilisers. KCl supplied to them in 2016 amounted to 1.91 million tonnes, 8% higher than the previous year.
Agricultural producers consumed about 0.19 million tonnes of KCl in 2015. The major regional consumers were Krasnodar, Kursk, Lipetsk, Belgorod, Oryol and Voronezh regions.
The Russian agricultural market has a huge potential. Russia accounts for about 10% of the world’s arable land, and more than half of the land is planted with crops that require increased potash application such as wheat, sunflower, corn and sugar beet. Total potash consumption by Russian agricultural producers (including consumption of potash as part of NPK) in 2016 amounted to 0.67 million tonnes.
Another group of traditional industrial consumers – petroleum, chemical and nuclear enterprises – bought 0.15 million tonnes of potassium chloride for specific production processes in 2016, which was 9% less than in 2015.
In addition to potassium chloride, Uralkali sold 0.36 million tonnes of enriched carnallite and 1.04 million tonnes of industrial salt in the domestic market in 2016. The main consumers of enriched carnallite are OJSC Solikamsk Magnesium Plant and PJSC VSMPO-AVISMA Corporation, which use it in production of magnesium.
The Company strictly complies with its obligations to ensure non-discriminatory access for consumers of potash fertilisers. In November 2010, the Federal Antimonopoly Service (FAS) of Russia approved rules, according to which, starting from 2011, the potash price for NPK producers is based on the weighted average price on the foreign market with the lowest price before transport and other logistics costs (minimum export price). The principle of establishing the potash price for Russian NPK producers on the basis of the minimum export price is also enshrined in the FAS Recommendations for ensuring non-discriminatory access to potassium chloride in effect from 1 January 2013 until 31 December 2017. Since October 2013, prices have been calculated on a monthly basis, enabling the Company to respond promptly to changes in international prices and change prices for potassiumcontaining complex mineral fertilisers in world markets in accordance with market conditions. When calculating selling prices for 2016, NPK producers were provided with an additional discount of US$27 (in rouble equivalent).
In connection with Russia’s accession to the WTO and transition from 1 January 2013 to market pricing on the domestic mineral fertiliser market, on 15 February 2016, the Russian Association of Fertiliser Producers (RAFP) and the Employers’ Association All-Russian Agro-Industrial Union (Rosagropromsoyuz) signed a cooperation agreement in order to meet the mineral fertiliser needs of Russia’s agribusiness sector for the period until 15 February 2017. This agreement determined the main economic principles of stakeholder interaction on the domestic market. In particular, members of the RAFP and Rosagropromsoyuz were recommended to use market pricing principles.
Since 1 July 2013, potash prices for Russian agricultural producers have been calculated according to the minimum export price formula in line with FAS recommendations to ensure nondiscriminatory access for consumers of potash fertilisers on the Russian market.
When calculating prices for industrial consumers, Uralkali also went by the formula based on the minimum export price.
Positioning a company as an industry leader presupposes a high level of expertise and social responsibility. Today it is not enough simply to produce high quality products; it is also important to introduce international scientific expertise into the daily practices of farmers, as the end consumers, in order to ensure optimal crop yield. Uralkali is a member of Russian and international associations such as the International Fertiliser Industry Association (IFA) and Russian Association of Fertiliser Producers (RAFP), and serves on the scientific committee of a recognised international institute engaged in applied research in agricultural chemistry, The Fertiliser Institute (TFI).