OREANDA-NEWS. August 06, 2009. Major Russian fertilizer producers Acron Group, Uralchem Group and Rossosh Minudobreniya intend to ask the Russian Government to consider introducing quotas on potash exports from Russia, reported the press-centre of OTKRITIE FC.

According to a joint statement, this measure is necessary in order to support the producers from mineral monopolies such as Silvinit and Uralkali, which are thought to be deliberately creating an artificial shortage to inflate prices. Indeed, due to an alleged deficit of potash, fertilizer producers had to stop fertilizer production. Previously, the mass media reported that Sillvinit had refused to sign a long-term contract with domestic customers at the proposed price of RUB3,955/ton, opting only for short-term contracts at that price.

View: In the event that the government supports the actions of producers, the overall impact would depend upon the volume of quotas introduced. Currently, export deliveries comprise the lion’s share of Silvinit’s and Uralkali’s revenue. But we doubt that the government will acquiesce to such a proposal.

Action: We treat the news as neutral for potash producers and reiterate our BUY rating on Silvinit and Uralkali.