The volume of trading in mineral fertilizers on SPIMEX has exceeded 1 million tonnes since the start of trading. The organised mineral fertilizer market is developing rapidly: the volume of trading at the Exchange's Mineral Raw Materials and Chemical Products section was 873,000 tonnes for the first 10 months of 2021, 8 times larger than for the entirety of 2020. PhosAgro Group is the leader in exchange sales with a 77% share, followed by Akron and EuroChem with 7% and 5.3%, respectively.
The trading of mineral fertilizers began on SPIMEX in December 2017. Based on the results of a pilot project implemented through the Exchange Committee, the Russian FAS decided to further develop trading and expand the range of products that are sold on the Exchange.
The development of trading is in line with the goals and objectives set out in the National Plan for the Development of Competition in Russia for 2021-2025. A joint order of the FAS and the Russian Ministry of Industry and Trade dated from 03.02.2020 established the minimum volumes of exchange sales for dominant companies (in accordance with Article 6 of the law ‘On the Protection of Competition’).
Today, Russia's leading mineral fertilizer producers are trading on the Exchange: PhosAgro Group, MCC EuroChem, Uralchem, Akron Group, PJSC KuibyshevAzot, PJSC Togliattiazot, JSC SDS Azot, LLC Gazprom neftekhim Salavat and JSC Minudobreniya (Rossosh).
Vitaly Korolev, Deputy Head of the Russian FAS, said: “The positive dynamics of mineral fertilizer sales through the Exchange demonstrated a particular demand for an additional marketplace for these products. The St. Petersburg International Mercantile Exchange has become this marketplace for the buyers and producers of fertilizers, which contains a particular system of incentives for transparent pricing. The National Plan for the Development of Competition for 2021-2025 envisages the further development of exchange trading instruments.”
In March 2021, at a meeting of the Russian Government on preparing the agricultural industry for the spring season, an instruction was issued to inform agricultural producers about the opportunity to purchase mineral fertilizers on the Exchange.
Sergey Mitin, First Deputy Chair of the Federation Council Committee on Agrarian and Food Policy and Environmental Management, stated: “The Federation Council and the Committee are keeping a close eye on the agricultural products market and its related mineral fertilizer market. Our main efforts now are aimed at creating long-term conditions that would guarantee, through market mechanisms, price predictability and quality saturation of the domestic market with mineral fertilizers, and to improve measures to develop competitive infrastructure and mechanisms to develop the mineral fertilizer market, including exchange trading. In this situation, exchange trading in mineral fertilisers will play a very important role, as the exchange is an effective market instrument for achieving the goals set by the President and Government of the Russian Federation: to form representative indicators of market prices for key product groups.”
Lyudmila Talabayeva, member of Federation Council Committee on Agrarian and Food Policy and Environmental Management, commented: “One million tonnes of mineral fertilisers have been sold on the Exchange: that’s an important milestone. The exchange-based fertilizer market is very young, having begun operating in December 2017. But the accumulated sales volume of one million tonnes bears witness to the fact that it has already reached a certain maturity. I would like to congratulate both market players, who have gained a new channel for buying and selling fertilizers at market prices, and the Exchange itself, which has done an excellent job in developing an exchange-based mineral fertilizer market and attracting participants. For instance, the participation fee was reduced to 5,000 roubles per year while minimum exchange lots were cut down to 5 tonnes, which has made it possible even for small farms to buy mineral fertilizers directly from producers.”
Andrey Guryev, President of the Russian Fertilizer Producers Association (RFPA) and CEO of PhosAgro, said: “We are experiencing the fastest trading dynamics in four years. This is not speculation, but evidence of an exponential increase in consumer interest in this channel. This includes farms and small agribusinesses, for whom new exchange instruments have been specifically introduced. We plan to expand our regional logistical infrastructure and increase the number of our own exchange-traded supply bases as part of our sectoral investment programmes. Over the next seven years, RFPA member companies will invest a total of RUB 2 trillion in developing the domestic mineral fertilizer industry. By 2026, production capacity will be double the 2013 level. This is enough to ensure a high level of product availability for our farmers against any trend in exchange-based demand.”
Alexey Rybnikov, President of SPIMEX, stated: “Achieving 1 million tonnes of sales since the start of trading is a landmark figure for the exchange-based mineral fertilizer market. Our project demonstrates that we can successfully scale up exchange trading in key commodity markets. The Exchange has become an important channel for selling mineral fertilizers, which forms the basis for pricing indicators in the domestic market. The accessibility of trading is noteworthy: companies of all levels, from the largest holdings to small agricultural enterprises, are represented on SPIMEX.”
Maxim Kuznetsov, RFPA Executive Director, commented: "Producers are working systematically to comply with the joint order of the Russian FAS and Ministry of Industry and Trade and are helping agricultural producers operate effectively at SPIMEX. Some companies have set up specialised exchange units, whose responsibilities include explaining the benefits and potential of trading on the Exchange to consumers. It is clear that these efforts are bearing fruit.”
Andrey Vovk, CEO of PhosAgro-Region, said: "Exchange trading has become another dynamically developing channel for interaction with Russian agricultural producers. It allows consumers to find the fertilizers they need without additional costs, near their farms, and on the most favourable terms. PhosAgro-Region's mineral fertilizer distribution network is successfully integrated into the structure of exchange sales. Today, 7 key grades of PhosAgro granular and liquid mineral fertilizers are traded on SPIMEX, and are available from PhosAgro-Region's 126 supply bases across the country.”
Tatiana Gubina, Chief of Staff of the Russian Potato Union, stated: “The Russian Potato Union supports all competitive and market-based forms of mineral fertilizer sales and hopes that the increase in the sales volume of exchange-based trading will increase access to fertilizers and improve pricing transparency. We congratulate our colleagues on their work in this direction and on the growth in turnover.”
Exchanged-based trades in mineral fertilizers are carried out from over 200 supply bases located in the Amur, Belgorod, Bryansk, Volgograd, Vologda, Voronezh, Irkutsk, Kaliningrad, Kaluga, Kemerovo, Kirov, Kursk, Leningrad, Lipetsk, Moscow, Nizhny Novgorod, Novgorod, Novosibirsk, Omsk, Orenburg, Orenburg and Voronezh regions, Orel, Penza, Rostov, Samara, Saratov, Sverdlovsk, Smolensk, Tambov, Tula, Tyumen, and Ulyanovsk regions, the Republics of Bashkortostan, Kabardino-Balkaria, Crimea, Mari El, Mordovia, North Ossetia-Alania, Tatarstan and Chuvashia, and the Altai, Krasnodar, Krasnoyarsk, Perm, Primorskiy and Stavropol regions.
The St. Petersburg International Mercantile Exchange (SPIMEX) is the largest commodity exchange in Russia, organising exchange trading in the oil, natural gas, LPG, timber and building materials, fertilizers and futures markets. SPIMEX aims to create a transparent mechanism for fair pricing on Russian commodities. The exchange was established in May 2008. The Exchange's licence and clearing licence can be found on SPIMEX's website.
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