Uralkali expects strong demand for potash fertilizers in 2013
June 17, 2013 (Source: Belta) — Uralkali, the largest shareholder of the Belarusian Potash Company, expects a 7% increase in the consumption of potash fertilizers in 2013, BelTA learned from the press service of the company.
“With increased planting acreage expected this year supported by low grain stocks and positive agriculture economics, we hope to see worldwide potash consumption growing by around 7% in 2013 compared to 2012, Uralkali CEO Vladislav Baumgertner said.
Consistent with its announcements in November 2012, Uralkali decreased the output in Q1 2013 and utilized this time to implement maintenance and development works. The start of the year is traditionally slow, with potash consumers preparing for the upcoming planting campaign. Q2 began with robust demand from the customers.
Uralkali also announced the Q1 2013 key figures: revenue was down 18% year-on-year to $738 million; production was up 10% year-on-year to 2.1 million tonnes of potassium chloride (KCl); sales contracted by 10% y year-on-year to 1.9 million tonnes of KCl; average export price went down by 17% year-on-year to $313 per tonne of KCl. “In Q1 2013 the company’s performance reflected the market conditions which just started to recover following a weak H2 2012,” Vladislav Baumgertner said
The sluggish potash market in Q4 2012, influenced by the decision of China and India not to conclude new contracts in H2 2012, and the downward trend in spot prices, impacted the Q1 2013 figures as well. With Chinese contracts negotiated at the beginning of the year, the potash market started to pick up. However, the unfavorable weather conditions in many regions of the world, including Europe, the United States, and China, delayed deliveries until later in spring.
Brazil was the most active market in Q1 2013. Uralkali expects very strong demand in July and August as buyers start to stock up ahead of the September/October application season. Potash demand is expected to exceed last year’s record level, potentially reaching 7.8-7.9 million tonnes in 2013.
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Another major project for Q1 2013 was the ongoing granulation expansion at Solikamsk-2 block, which, once completed, will increase the plant’s granulation capacity by 0.5 million tonnes to 1.55 million tonnes per year.
“Observing positive agriculture market developments and believing in strong underlying potash market fundamentals, we continue to implement our capacity development program to ensure that we are fully fitted and able to maintain our cost leadership to benefit in the times when the market requires new capacities and new players come to the potash market,” Vladislav Baumgertner said.
Simultaneously Uralkali has engaged with a renewed vigor in farmer education programs promoting balanced fertilizer application. According to Vladislav Baumgertner, statistics show that the level of a farmer’s knowledge is linked to productivity. “This is why we believe that farmer education is crucial to increasing yields and improving global food security,” he said.
Uralkali is one of the world’s leading producers of potash, accounting for nearly 20% of the world production. Uralkali (50% of shares) together with Belaruskali (45% of shares) and the state association Belarusian Railways (5%) are shareholders of the Belarusian Potash Company. The Belarusian Potash Company accounts for 43% of the world exports of potash fertilizers.
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