The Procurement Director of AgroTerra spoke to Agroinvestor about their purchases

Last year, producers of mineral fertilizers saw higher profit from exports compared to the previous year, despite facing various formal and informal export restrictions. Additionally, local farmers increased their fertilizer purchases in 2022. Fortunately, no shortage is predicted for this year. However, both farmers and market experts are concerned that high fertilizer prices could lead to a significant decrease in domestic usage. Several other countries may also experience this trend if exports from Russia are not restored to previous levels.

“As to the volume of our purchases, we did not change it significantly,” said Artur Paronyan, the Procurement Director of AgroTerra. Although, due to delayed harvesting, the company had to store certain types of fertilizer for the next season and made additional purchases. Overall, the procurement remained largely unchanged this year, except for the inclusion of new products like stimulants and amino acids. The company also increased the volume of micronutrients as they have shown positive results on trial fields.

In addition, AgroTerra continues its research aimed at reducing their carbon footprint. “We are testing technological methods to decrease the use of mineral fertilizers while maintaining economic efficiency. For example, we have proven that the use of cover crops, which accumulate nitrogen, can reduce the need for similar fertilizers,” Artur Paronyan added.  “We are conducting these experiments to improve both our environmental and economic sustainability.” The Procurement Director noted that the cost of mineral fertilizers per hectare increased by 30-40% in the 2022/23 season.

As for the volumes of fertilizer consumption, the company is constantly adjusting them. AroTerra uses an optimization model to determine the soil's specific nutrient requirements. “This model optimizes the nutrition system for each field and crop to maximize the margin,” explained the procurement director. Thus, given low prices for crops and increasing prices for inputs, the company is reducing fertilizer consumption in regions with high weather risks and low field potential.

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