FINAM Investment Company lowered its estimates of Uralkaliy common stock’s target price from $5.4 to $5.02 by the end of 2009. The company still suggests that it will be a good idea to keep buying these shares, the spokesperson for the investment company says.

FINAM’s analysts believe that Uralkaliy’s production and financial development indicators will be going down this year, partially due to the re-investigation of the causes of the accident in Berezniki in 2006. This re-investigation could actually do a lot of financial damage to the fertilizers manufacturer.

‘The global financial crisis has already forced many agricultural enterprises to stop buying as many fertilizers as they used to; as a result, the demand for Uralkaliy’s produce has decreased on a number of markets, so the manufacturer had to decrease its production output in the last quarter of 2008. For one, Uralkaliy produced 6.4% less potassium chloride last year than in 2007 (that is, only 4.8 million tons). The original plan, however, provided for the production of 5.4 million tons of potassium chloride,’ FINAM’s report states.

‘The decrease in the global demand for potassium-based fertilizers is going to result in a significant drop in Uralkaliy’s production output in the first half of 2009. The company will only be able to partially make up for this in the second half of the year,’ FINAM’s Mikhail Frolov says.

‘Nevertheless, we expect the company to produce up to 5 million tons of potassium chloride in 2010,’ he adds.

What is more, Uralkaliy had to reconsider its plans to develop Ust-Yavinskoye deposit under the current unfavorable economic circumstances, which will probably make its production growth slow down dramatically.