Moscow – PhosAgro subsidiary PhosAgro-Region, which is Russia’s largest mineral fertilizer distribution network*, has increased fertilizer sales to Russian farmers in 9M 2020 to 2.93 million tonnes, growth of 9.7% year-on-year.
Sales of PhosAgro's own production increased by 6.4% year-on-year to 2.44 million tonnes. Phosphate-based fertilizer sales increased by 5.3% year-on-year and accounted for over 80% of the total volume. Sales of nitrogen-based fertilizers increased by 12% year-on-year to 416 thousand tonnes. Products from other manufacturers sold via PhosAgro-Region’s distribution network amounted to around 480 thousand tonnes.
Growing demand for PhosAgro’s phosphate-based fertilizers was driven by their high efficiency, as well as work by plant cultivators to improve Russian grain and the drought conditions prevalent in major agricultural regions. Complex phosphate-based fertilizers containing sulphur made the largest contribution to PhosAgro's growing domestic sales. These grades of fertilizer help to produce milling wheat with higher protein and gluten content. A prolonged heat wave led to a moisture deficit, which caused record growth in demand for liquid complex fertilizers: regions in the Black Earth Region increased consumption of liquid complex fertilizers by 2.8 times, in Siberia more than 2 times, and regions of southern Russia by 1.4 times.
Granular ammonium sulphate sales also saw stable growth in response to demand from farmers. Production of this product was launched by the Balakovo branch of Apatit this spring.
PhosAgro-Region continued to expand the geography of its operations in order to work directly with Russian farmers. In the fall of 2020, the 18th
regional office of PhosAgro-Region opened in Ryazan. The growing demand for mineral fertilizers from the region’s agricultural industry and direct work with producers mean that PhosAgro expects sales in the Ryazan region to double over the next three years.
Work is underway to create the company’s fifth distribution centre in the Rostov region. This DC is planned to be launched on the eve of spring field work in the South of Russia. Another PhosAgro-Region distribution centre in one of the Black Earth regions is in its final stages of completion.
PhosAgro CEO Andrey Guryev said: “Domestic sales accounted for more than 30% of PhosAgro’s total sales in 9M 2020. We are supplying Russian customers for the winter sowing season as a matter of priority.
“The high quality of this season’s harvest, combined with implementation by farmers of Russian Ministry of Agriculture initiatives to increase soil fertility, give us confidence that fertilizer inventories will be build up ahead of next year’s field work. At the same time, we are carefully studying the possible consequences of the moisture deficit observed at the start of winter sowing, and we will be ready in the coming spring to offer effective mineral nutrition systems to correct the state of crops using modern NPK fertilizers.
“The Russian market is an invariable priority for us. In fact, innovative mineral fertilizer grades enjoy high demand in Russia, with significant interest in products that help to increase crops’ resistance to adverse weather and that ensure the high quality of key cultures. PhosAgro's portfolio includes more than 50 fertilizer grades, 19 of which are complex fertilizers that are unique for Russia, with microelements all in one granule. Today we are conducting practical testing of these grades together with one of the largest Russian agricultural holdings in a number of Black Earth regions."
* by total volume of fertilizer sales and by fertilizer storage capacity.