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Phosagro books steady rise in Q2 fertilizer output amid growing demand

PJSC PhosAgro boosted its fertilizer output in the second quarter by 15.7% year over year to 2.0 million tonnes, the company said Aug. 8.

Phosphate-based fertilizer production was the main driver behind the increase, growing by over 20% year over year to about 1.7 million tonnes, while nitrogen-based fertilizer output remained relatively unchanged at 385,000 tonnes.

Total fertilizer sales rose 15% to about 2.1 million tonnes, supported by growing demand from Russia and Brazil.

"In terms of product mix, we saw comparable 9%-12% year-on-year growth in sales of both ... crop nutrients and concentrated ... fertilizers. The increase in concentrated fertilizer sales was supported by a more-than 25% year-on-year growth in [monoammonium phosphate] sales, driven by demand from the Russian and Brazilian markets," CEO Andrey Guryev said in a statement.

He added that Russia remains the company's priority market with a 20% increase in sales year over year in the first half. PhosAgro also stepped up shipments to Brazil by more than 60% and doubled volumes going to other countries in the Commonwealth of Independent States.

"Looking at global seaborne markets in the first half of 2017, we saw further expansion of export-oriented capacities in the [Middle East and North Africa] region with the continued ramp-up of new units in Morocco, as well as growth in export volumes from China," he said.

Commenting on the outlook for the rest of the year, Guryev said the risk of potential production cuts in China, the start of pre-winter buying activity in the northern hemisphere and high season in India could protect market prices against additional supply coming from OCP and Ma'aden.