Mineral export

In 2007, export of mineral fertilizers may decrease by 25-27%, experts say. Besides general “market decline” of the previous year the situation may be complicated by Federal Antimonopoly Service (FAS), which plans to establish export duties for potassium.  

Export directions

Russia’s major mineral fertilizers export markets are China (36.8%), India (26.5%), USA (7.8%), Korea (6.3%) and Brasilia (4.2%). Export to other countries makes about 17.8%. In 2006, export of mineral fertilizers from Russia fell by 20% to 11.7 million tonnes. Almost all specialized sea terminals demonstrated decrease of mineral fertilizers transshipment volume. As Sergei Semeonov, Development Director of R&D company Marine Construction and Technologies, told PortNews IAA, export decrease should be attributed to general aggravation of the market situation in 2006. High results in transshipment of mineral fertilizers have been preserved by the port of St. Petersburg – 5.196.6 million tonnes of fertilizers per year. 29-percent decrease accounts for internal problems of Uralkali OJSC which exports 90% of its product via Baltic Bulk Terminal in St. Petersburg. Last year, Uralkali decreased export to China and India as a result of competition with local manufacturers, Semeonov told. Besides, the decrease may be attributed to emergency situation at Bereznikovski potassium mine group No 1 of Uralkali, which usually covers 20% of export fertilizers. 

 A terminal per each manufacturer

Experts say the growth rates of the demand for potassium fertilizers makes about 3% annually. However, despite high demand for fertilizers at world market, number of specialized terminal for transshipment of this product is limited in Russia. As of today, there are only three such terminals in Russia. Two of them are in the North-West region (in St. Petersburg and in Murmansk) and one terminal is in the Far East. Two more complexes may be built in the port of Tuapse and in Leningrad region. However these are only projects for the moment being. The only industrial manufactures of potassium chloride in Russia are Silvinit OJSC and Uralkali OJSC. In 2006they produced about 5.3 million tonnes and 4.2 million tonnes of product respectively. The largest manufacturer of nitrogen fertilizers is EuroChem OJSC. Acron OJSC produces mixed fertilizers.  All the above companies excluding Acron have their own terminals in Russia for transshipment of their product. Uralkali transships its product at Baltic Bulk Terminal in St. Petersburg. Murmansk specialized terminal for transshipment of dry mineral fertilizers is owned by EuroChem's  subsidiary Agrosfera CJSC. In 2006, the company’s turnover made 1.223 million tonnes.
Besides, there are facilities for transshipment of fertilizers at Vostochny port (Far East). Almost all fertilizers handled by the port are transshipped via specialized Vostochno-Uralski Terminal (90.3%). According to Eastern branch of Rosmorport FSUE, in 2006 the terminal handled 847.1 thou tonnes of fertilizers. VUT is used for transshipment of Silvinit product. According to Semeonov, lack of specialized terminals should be explained by the fact that mineral fertilizers were historically transshipped via the port of Ventspils (Latvia). In particular, Acron, the largest manufacturer of mixed fertilizers, still does not have any own terminals in Russian ports. In 2005, the company planned to finalize construction of a 5.5- million tonne complex for transshipment of mineral fertilizers in the port of Ust-Luga. However, several years ago, the company left the JV with Ust-Luga owing to the port’s delay of investments. Thus, Acron decided to focus on Estonia. The company plans to build a terminal in the port of Sillamae with annual capacity of 1 million tonnes of ammonia and 0.5 million tonnes of liquid ammonia fertilizers. The project is said to be costing EUR 50 million. However, the project implementation has been suspended owing to recent events in Estonia. EuroChem, another large manufacturer of fertilizers, plans to implement two project on construction of service terminals. Tuapse bulk terminal with a capacity of 2.3 million tonnes will be used for acceptance and short-term storage of mineral fertilizers as well as for their further export by sea-going transport. The terminal is to handle 3 types of mineral fertilizers: carbamide, ammophos and nitroammophos. Similar project may be implemented in Leningrad region. As Dmitri Sterzhnev, Director General of EuroChem, told late in May, it would be reasonable to build a terminal for export transshipment of mineral fertilizers close to Phosphorit LLC in Kingisepp district. According to Sterzhnev, there is no need to build a terminal with capacity below 2 million tonnes. Considering the perspectives, Sergei Semeonov told PortNews IAA that Leningrad region does not have many places for construction of such a terminal. “There is a timber terminal Factor in Ust-Luga, but it may accept only little vessels, Semeonov thinks. It could be Vistino zone but I have not heard anything about construction of new terminals”. In the nearest future, new international commercial seaport is to be built at Taman peninsular. The project implies development of a modern infrastructure including container and coal terminals, grain complex and a terminal for transshipment of mineral fertilizers. It is planned to put terminal for transshipment of liquid ammonia into operation in 2007 – 2008.  

Duties to slow down export

However, Federal Antimonopoly Service tries to influence the activities of mineral fertilizers manufacturers. Under FAS requirements, by July 1 of the current year, Sivinit should set average price for potassium chloride at maximum RUR 2,100 per tonne for domestic market, while Uralkali’s price should not exceed RUR 2,950 per tonne. Establishment of export duties may also force manufacturers to cut prices. Last week, export council on agricultural complex under FAS recommended establishment of export duties for potassium chloride.

Chausova Larisa