OREANDA-NEWS. February 09, 2010. In general, export data published by the Federal Customs Service live up to our expectations and reflect the strong demand for nitrogen and compound fertilizers and high competitiveness of Russian fertilizer manufacturers.

The Russian Federal Customs Service (FCS) has reported data on chemical product exports from Russia in 2009.

The figures published by the FCS are generally in line with the main trends in the chemical sector displayed by those industry members that have already released operating statements for 2009. The surge in nitrogen and compound fertilizer exports has come as no surprise, as these product lines were in high demand during almost the whole of 2009. Russian fertilizer makers, who purchase raw materials, natural gas, apatite concentrate and potash at low domestic prices, retained their competitiveness on export markets, and managed to take advantage of the buoyant demand for their goods by increasing productive output. As for the drop in ammonia exports, it was mainly caused by the fact that it was more profitable for manufacturers to increase the volumes of ammonia processing amid a downturn in raw-material prices in order to maximize manufacturing margins. The fall in potash fertilizer prices and export deliveries has come as no surprise either: demand for fertilizers of this type decreased much sharper than for nitrogen and phosphate fertilizers, since potash fertilizers are the least profitable for farmers in terms of the fertilizer cost to crop yield ratio.

The Customs Service statistics have primarily highlighted the dominant positions of nitrogen and NPK fertilizer manufacturers: Acron, Dorogobuzh and Ammofos. Out target price for Acron (RTS: AKRN) is currently under review. The target for Ammofos (RTS: AMMO) on 31 December 2010 is USD 119.60 per share with a BUY rating.