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ONE of the world’s leading vertically integrated phosphate-based fertiliser producers, PhosAgro Group of Russia posted a 4,3 percent year-on-year production increase to over 5,6 million tonnes in the six months ended 30 June 2023.
The growth was driven primarily by an increase in DAP/MAP production during the ramp-up to design capacity at the production complex in Volkhov, which was built as part of the comprehensive long-term development programme.
Reads part of the financial results, “In 1H 2023, production of mineral fertilisers and other chemicals increased by 4,3 percent year-on-year to over 5,6 million tonnes. This growth was driven primarily by an increase in DAP/MAP production during the ramp-up to design capacity at the production complex in Volkhov, which was built as part of the Company’s comprehensive long-term development programme.”
“At the same time, DAP/MAP sales rose by 5,8 percent over the same period, driving high margins in the current price environment.
“Total fertiliser sales in 1H 2023 decreased by 4,3 percent year-on-year to about 5,5 million tonnes, mainly due to the stockpiling of mineral fertilizers for seasonal deliveries to markets in Latin America and Asia after meeting the needs of the Russian market, ” it added
According to the results, revenue for 1H 2023 amounted to US$2,8 billion down 36,8 percent year-on-year.
The decrease in revenue was due to a drop in global fertilizer prices from their peak in early 2022 when a high level of uncertainty and sanctions pressure on Russian producers (the largest players in the global fertilizer market drove up prices for all types of fertilizers amid disruptions in global supply chains.
It said sales volumes and regional product distribution in the second quarter of the year were in line with seasonal changes in demand, with increased sales to markets in Russia, North America and Europe.
It noted that excess fertilizer production compared with sales in the second quarter of the year enabled it to stockpile a sufficient amount of product to satisfy the expected seasonal increase in demand in the third quarter from key markets in India, Brazil and other regional markets in Asia and Latin America.
According to the Russian Fertilizer Producers Association, PhosAgro remains the leader in terms of supplies of agrochemical products to the priority Russian market.
On the outlook, PhosAgro said the third quarter has historically been marked by increased seasonal demand from key markets for nitrogen- and phosphate-based fertilizers in India, Brazil and other regional locations in Asia and Latin America.
To that end, low levels of carry-over stocks in North American and European markets will drive an earlier resumption of seasonal demand.
“As a result, prices have shown a strong increase since the start of the third quarter and may stabilise above 2Q 2023 prices,” it noted.
Bongani Ndlovu