Ru En

2010 Potassium Chloride Supply Contracts

Acron received an offer from UralKali to supply the required volumes of potassium chloride in 2010 at RUB 4,300 per tonne. So far, the company’s experts have approved all terms and conditions of the proposed contract, except for a mechanism to adjust the price in the event that customs duties on potassium chloride exports are introduced. Uralkali insists that the contract price should be increased automatically to the level of the export price.
With this offer, Uralkali abides by recommendations issued by the Russia’s Federal Anti-monopoly Service and Ministry of Industry and Trade, having fixed the factory price for potassium chloride supplied to the domestic market at the maximum level. However, regulatory authorities recommended setting a uniform price for all of 2010, and these recommendations contain no reservation for any adjustment of the price of potassium chloride if export duties are imposed.
Acron has never attempted to obtain adjustments to input prices based on whether or not export duties are levied on its end products and sees no reason to make such a link if potassium chloride export duties are imposed.