On July 27, 2010 RF Prime Minister Vladimir Putin met with Chairman of Acron Coordinating Board Viatcheslav Kantor.
During the meeting Putin and Kantor discussed the problems and development opportunities of the mineral fertiliser industry.
First of all, the participants discussed the issues of mineral fertiliser pricing for domestic farmers. Prime Minister Putin mentioned the price cap agreement between the Russian Association of Fertiliser Producers (RAPU) and the Agro-industrial Union and encouraged the RAPU to consider providing Russian farmers with mineral fertilisers at the lowest possible prices due to the drought that has already hit 23 regions of the Russian Federation. Coordinating Board Chairman Kantor assured the Prime Minister that fertiliser producers are aware of their responsibilities to the Russian agricultural sector and will prevent a fertiliser price increase.
Another key matter on the agenda was the opportunities for development and challenges facing the fertiliser industry. Kantor stated that, while companies in the sector are recovering from economic downturn, profit levels are still low. He also mentioned that the industry still suffers from a number of systemic problems, foremost of which is the troubled relationship between monopolistic raw material suppliers and fertiliser producers. The absence of long-term agreements with clear price formulas prevents long-term pricing regulation and feeds the practice of spot sales.
According to Kantor, raw material security is the key to long-lasting and efficient development for processing companies. With this in mind, for the past several years Acron has been building an independent phosphate project from the ground up. Kantor suggested establishing joint ventures between raw material producers and processing companies as another option for solving the supply problem. Such ventures would ensure a stable, high capacity utilisation rate, reduce the price of the end product and meet the demand of the Russian mineral fertiliser market.
Putin agreed that such initiatives are important and stated that experts from the RF Ministry of Economic Development and Trade will further analyse them.
The full text of the meeting’s record is available at the official web site of the RF Prime Minister.