Production of mineral fertilizers in the Leningrad region
Photo: Alexander Petrosyan / Kommersant
While Chinese manufacturers have cut exports of phosphate fertilizers on the background of the abolition of export duties and a new environmental policy in the country, “FosAgro” is going to increase it by 20% by 2020. Special interest in “FosAgro” to Latin America, where the company hopes to increase deliveries by 50% by 2020
One of the largest global producers of phosphate fertilisers, PhosAgro plans to increase exports by 2020 by 20%, to 6.1 million tonnes, increasing its market share in Europe and Latin America, said sales Director of the company Andrei Sokolov during the presentation of the investor day, PhosAgro in London. He believes that companies succeed largely due to the decline in supply from China.
According to the presentation of PhosAgro, one of the world’s largest exporters of fertilizers — China — has reduced the volume of exports of fertilizers from phosphates by 20% in 2016. The main reason for the reduction in the supply by China of export markets is the abolition of export duties on fertilizer, which has reduced prices, said co-owner and General Director of “FosAgro” Andrey Guriev. “China framed himself, abolishing the export duty. Prior to that, prices were at a high level, and Chinese producers were able to sell phosphate and nitrogen fertilizer domestically at a price above export duties”, — he explained the investor Day in London. After the abolition of this tax of the enterprises were closed, and product prices fell.
In addition to the fees, the decline in Chinese exports of fertilizers, in his opinion, will affect the country’s environmental policy, the victims of which may be about 30% of producers.
“China is a “black box”. But now he is sending positive signals,” said Guriev, during the presentation of the company’s strategy to investors.
Key foreign markets for PhosAgro will Europe and Latin America. The most promising export market, the company believes Latin America.
By 2020, Latin America PhosAgro intends to increase sales by 50% to 2 million tons, compared with the year 2016 (1.3 million t) amid growing demand for fertilizers in Brazil. The company’s market share in the region will grow by 3 percentage points to 12%, predicts Guriev.
In Europe”, Fegaro” plans to increase sales of fertilizers by 20% over the previous year (2 million tons), up to 2.4 million tons, with market share of phosphate fertilizers is expected to increase from 19% to 22%. The company expects the balance of supply and demand in the sector of phosphate fertilizers over the next five years.