Uralchem supports the position of the Ministry of Economic Development of Russia
The Ministry of Economic Development of Russia doubts the advisability of adopting the resolution of the Government of Russia on the inclusion of mineral fertilizers in the list of goods, information on which is provided to the exchange, even though the related contracts were signed outside the organized trading. The initiator of the adoption of these amendments was the Ministry of Agriculture of Russia (earlier similar amendments were initiated by the Federal Antimonopoly Service).
According to the statement of the Ministry of Economic Development of Russia, such actions won’t bring positive results, on the contrary, will create discriminatory conditions for Russian producers of mineral fertilizers and give advantages to the foreign competitors. The department says that “the disclosure of information on all the over the counter deals concluded in the domestic market, including volumes, prices and discounts, creates an evidence base for foreign competitors against Russian producers, which may be used to initiate and conduct trade investigations against the Russian Federation”.
Uralchem believes that the position of the Ministry of Economic Development is even more relevant since there are plans of the European Union to introduce a carbon tax on Russian products. “The adoption of such amendments will put the Russian agrochemical industry in discriminatory conditions, which is fraught with the loss of the Russian share in world markets and failure to meet the task of ensuring non-resource exports, provided by the President of Russia.”
Uralchem, as a representative of the real sector of the economy, notes that the situation with prices for mineral fertilizers, which became the reason for considering such amendments, is seasonal. Both industrial and agricultural demand reaches their peak in winter. This was the time of the simultaneously increased demand from the two consumer sectors. According to the company’s specialists, the systemic solution is the development of storage facilities and subsidizing farmers for purchases of fertilizers on an even basis throughout the year to accumulate stocks before sowing.
Besides, industrial consumers who are ready to pay more than farmers for the same fertilizers also participate in exchange trading. Therefore, it’s impossible to fix exchange prices. Moreover, Uralchem also receives requests from the regional authorities, saying that local consumers have difficulties in purchasing fertilizers at the exchange, and the authorities ask Uralchem to conclude direct over-the-counter contracts.
It should be noted that a similar initiative from the Federal Antimonopoly Service had been previously rejected by the Russian Government. The arguments of the Ministry of Economic Development on the negative impact of the amendments were taken into account, as well as the position of the Russian Union of Industrialists and Entrepreneurs.
Uralchem believes that it’s crucial to take into account the opinion of the experts of the industry before the government makes a final decision. There is a need to change the methods of interaction of the Russian authorities with representatives of industries, public organizations and experts and to abandon a formal approach in communicating with them. And today the government is taking a step towards business creating a new department of expertise and planning to improve the feedback system on the adopted legislative acts. The task of structural changes was set by the Prime Minister of Russia Mikhail Mishustin.