Moscow, 30 October 2008 – Urakali (Berezniki, Perm Territory) will curtail Q4 production of potassium chloride by 500 thousand tonnes in 2008. The company’s revised total output for the year is 4.9 million tonnes.

The turmoil in the global financial markets has impacted all areas of the commodities sector, including agriculture. The wave of reactionary selling of liquid assets, fuelled by the downbeat mood in the stock and commodity markets and liquidity crisis, have triggered sharp decrease in crop prices that today do not reflect the industry’s robust fundamentals, underpinned by growing population, less arable lands and the urgent need to fill the crop inventories that are now at historically low levels by the last 10 years.

Uralkali’s decision to cut production by 500 thousand tonnes in Q4 2008 is prompted by the current decrease in potash fertilizers purchase in the global market as well as reduction in sales of Belarusian Potash Company. Furthermore, the planned reduction in production offers Uralkali a good opportunity to repair and modernize its facilities that for the last several years have been used at their full capacity and loaded by 100%.

Vladislav Baumgertner, CEO of Uralkali, said: “Amid the current plunge in actual demand, we have taken the prudent decision to reduce our production to a more appropriate level. Liquidity crisis is hindering the farmers’ ability to purchase and use fertilizers. However, we are confident that the situation is a result of temporary finance problems and has nothing to do with the industry’s fundamentals that still remain utterly solid. We strongly believe in the long-term strength of the potash industry and anticipate its resurgence once the market settles down."