Uralkali underlined the potential for potash groups to see
record sales this year as the fertilizer giant unveiled a 17% rise in its own
revenues, lifted by a "rebound in demand" fostered by Chinese orders.
Oleg Petrov, the Uralkali chief executive, said that the
potash market's "sluggish" close to 2013 had given way to improved conditions
as "customers returned to active buying, as they sought to replenish depleted stocks
and prepare for the spring sowing season".
"We expect the momentum to continue, and global potash
deliveries this year may set a new record of 58m tonnes," growth of 7% on 2013,
when volumes were curtailed by the market uncertainty following the break-up of
the Belarusian Potash Company cartel.
Russia-based Uralkali, which has previously forecast volumes of 56m-58m tonnes this year, last July stunned the market by quitting
the joint marketing operation with Belarus peer Belaruskali, prompting a
stand-off by buyers as they waited to see where prices would settle.
'Strong demand growth'
Uralkali on Thursday said that fresh orders announced by
China, the top importer of the nutrient, had driven a "rebound in potash demand"
"Customers who chose to delay or defer second-half 2013
potash purchases in anticipation of lower spring prices returned to the market
in the first quarter of 2014, and this led to a significant increase in potash
"Strong potash demand growth and improved overall
agriculture commodity prices translated into higher potash prices in major
markets," the group said, in comments which follow data from Canadian rival
PotashCorp showing a small recovery in prices in the benchmark Vancouver export
Potash shipments in Brazil "continued to grow at a record
pace", Uralkali said, echoing data from industry group Anda this week showing rising
fertilizer volumes in South America's major agricultural country.
In Central America, potash use has been "supported by strong
And Uralkali forecast firm trade ahead too in many major
markets, such as North America, where "demand is expected to be strong in 2014
as farmers replenish declining nutrient levels in their soils after record crop
production in 2013".
Europe, where fertilizer wholesalers have been restoring
depleted supplies, is expected to show "solid" demand, particularly in
countries in the centre and east of the region.
In South East Asia, volumes are expected to grow from 8.1m
tonnes last year to 8.4m-8,7m tonnes in 2014, as palm oil growers "invest
heavily in fertilizers to maximise returns".
Meanwhile Uralkali nudged higher to 3.7m-4.0m tonnes, from
3.5m-4.0m tonnes, its forecast for Indian imports, citing the support a
stronger rupee has given to the affordability of dollar denominated imports.
The comments came as the group unveiled sales of $862m for
the first three months of 2014, up 17% year on year, as stronger sales volumes
more than offset the impact of lower prices compared with the environment
before the BPC break-up.
Uralkali's sales volumes soared 63% year on year to 3.1m
tonnes, implying a drop in inventories, with production rising by 38% to 2.9m
"Robust demand enabled us to sell a large volume that we
produced working at almost full utilisation capacity," Mr Osipov said.
Uralkali ditched the BPC consortium to pursue a strategy of
maximising sales volumes, rather than restricting them to underpin prices, amid
claims that Belaruskali had been selling potash outside the cartel without the
agreement of its partner.
Uralkali depositary receipts, a proxy or shares, stood 2.0%
higher at $22.30 in midday deals in London.