Fertilizer Markets and Finance

PhosAgro raised hopes for phosphate demand by revealing that India, the top importer, had signed off on purchases well beyond the 500,000-700,000 tonnes revealed by North American exporters.

India had in fact signed a “1m-tonne contract” at the start of the month, the Russian fertilizer group said.

And “contracts for over 2m tonnes have been signed since then”, PhosAgro said.

The company declined to reveal further information on the contracts, although Agrimoney.com has learned separately of talk of India buying significant volumes too from China and Saudi Arabia’s Ma’aden.

Such purchases will ease a major concern over the announcement by North America’s PhosChem consortium at the start of the month of a500,000-700,000-tonne deal - that it was short on quantity, if firm on price, at $580 a tonne.

Read more at Agrimoney

OAO Phosagro (PHOR), Russia’s largest producer of phosphate fertilizers, plans to cut output of the crop nutrient by 18 percent in the first quarter from a year earlier following a slump in prices.

Phosagro will reduce production of diammonium phosphate and monoammonium phosphate, also known as DAP and MAP, the company said today in a statement, without specifying volumes. It will make more of its complex fertilizers until prices for the phosphate compounds recover, it said.

Phosagro’s decision follows a similar move by the U.S.’s Mosaic Co., its largest global competitor, which said yesterday it will cut phosphate output in the first quarter by 250,000 metric tons. DAP prices at Tampa Bay, Florida, have fallen 15 percent from their 2011 high in July to $572.50 (DAPHDT) this month.

“Recent declines in MAP and DAP spot prices are speculative and do not reflect the real economic fundamentals,” Maxim Volkov, chief executive officer of Moscow-based Phosagro, said in today’s statement. Mosaic said yesterday that prices have become “disconnected” from the “underlying agricultural fundamentals” and aren’t sustainable.

Phosagro agreed to reduce prices for Indian buyers on Nov. 24 after they demanded a revision to account for the rupee’s depreciation against the dollar.

“We expect that farmer economics and agriculture fundamentals will support higher prices and higher demand for these fertilizers ahead of the spring planting season,” Volkov said in the statement.

Phosagro also said today it plans to spend 7 billion rubles ($218 million) next year to improve phosphate-processing at its main production unit, Apatit, in the Murmansk region in northwest Russia.

To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

OAO Phosagro, the largest phosphate fertilizer maker in Europe, has an “ultimate goal” of a London primary listing, Chief Executive Officer Maxim Volkov said.

“It is the ultimate goal probably but right now we’re just at the beginning of this process,” Volkov said in an interview on Bloomberg Television’s “Countdown” with Owen Thomas.

Russian companies aim to lure foreign investors by offering shares in the U.K. OAO Polyus Gold, Russia’s largest producer of gold, closed a reverse takeover last month to gain a listing and aims to join the FTSE-100 Index. OAO Polymetal picked Deutsche Bank AG, Morgan Stanley and HSBC Holdings Plc to bring it to the London market, three people with knowledge of the matter said.