Russia's competition watchdog the Federal Antimonopoly Service (FAS) has started a probe against Uralkali, the world's second-largest potash supplier, following complaints that the company has fixed high prices for the nutrient.
In a statement, Uralkali said that it "has been informed that, on 24 October 2011 the FAS of the Russian Federation launched an investigation into the alleged setting of monopolistic high prices for potash by Uralkali".
"According to FAS, the investigation was launched following complaints from consumers of potash in relation to what they see as unjustified price increases," it added.
The abnormal price increase was in breach of the Federal Law of the Russian Federation 'On Protection of Competition," the statement said.
The Russian company Uralkali defended itself, saying that it sells potash as per the law and would co-operate with the FAS probe.
"Uralkali believes that it supplies potash to the domestic [Russian] market in full compliance with the current legislation. We will fully cooperate with the FAS throughout the course of their investigation," the statement said.
The company claimed that its terms of sales to domestic consumers are determined by the regulations and the company's marketing policy approved by the FAS.
In 2010, Uralkali had set favourable prices for farmers and the same rate would continue till 2011-end, it argued.
The company further said that the Russian NPK (nitrogen, phosphorous and potassium) complex fertiliser producers buy potash from itself at the minimum export price with certain discounts.
"Uralkali provides NPK producers with additional discounts for the potash volumes intended for the production of complex fertilisers for the domestic market," it said.
Similarly, Russian industrial consumers buy potash at the minimum export price excluding transportation costs.
Uralkali aims to produce 10.8 million tonnes of potash this year and is targeting total sales of 11 million tonne, out of which 9.2 million tonne would be exported to overseas markets. It exports potash through its trading arm, Belarusian Potash Company (BPC).
