Putin Orders Government to Rein in Fertilizer Prices
Source: Bloomberg, Lyubov Pronina and Marina Sysoyeva (3/2/11)
"Putin calls for iron fist on a 'cartel-like' industry."
"Despite the efforts that are being made, fertilizer prices are still growing," Putin told farmers today at a conference in Tambov, central Russia. Putin said he ordered his deputies Viktor Zubkov and Igor Sechin to "work out the necessary measures to restrain prices."
Medvedev in September called for an investigation into fertilizer prices as the country's worst drought in at least 50 years drove up food costs. OAO Uralkali and OAO Silvinit, Russia's only producers of the crop nutrient potash, agreed in November on a maximum price cap for farmers. Uralkali later agreed to buy Silvinit, acquiring the first 20% Feb. 28.
"If not on paper, then in spoken form, there exists a cartel and this all must be investigated as part of an antitrust process and punished," Medvedev said Sept. 6 in Voronezh, southwest Russia.
Uralkali and Silvinit, which sell products to Russian farmers at a discount to global prices, say that domestic producers of complex fertilizers compete with them on exports after buying potash from mining companies as a raw material.