India expects potash miners to offer decade-low price after Belarus deal

Chambal Fertilisers and Chemicals

28/06/2016 09:18

By Rajendra Jadhav 
    MUMBAI, June 28 (Reuters) - Leading global potash producers, 
including Russia's Uralkali  URKA.MM , are likely to supply the 
crop nutrient to India at the same price Belarus agreed, a key 
Indian negotiator with overseas suppliers told Reuters. 
    Belarus on Monday agreed to sell 700,000 tonnes of potash to 
Indian Potash Limited (IPL) at $227 per tonne, the lowest price 
in a decade.  urn:newsml:reuters.com:*:nL8N19J2SY 
    "Uralkali has very good relations with Indian buyers. We are 
hopeful that it will agree to $227," said P.S. Gahlaut, managing 
director of IPL, the country's biggest importer. 
    The contract price with Belarus is too low, and Uralkali, 
the world's biggest potash producer, is not yet ready to sign a 
potash supply contract with India, said a company spokesman. 
    "We cannot offer a higher price to any supplier. If they 
insist, then we can postpone purchases," Gahlaut said. 
    Usually, the first contract is signed by a major producer 
and then it becomes a benchmark for other miners. In the past, 
all suppliers have agreed over the price negotiated in the first 
contract. 
    This year, the price agreed upon by Belarus is a third lower 
than last year, and a few suppliers feel it is too low. 
    "Belarus agreed to a lower price in a hurry," said an 
official with a leading potash miner. 
    Major potash suppliers to India include Uralkali, Potash 
Corp of Saskatchewan  POT.TO   POT.N , Agrium Inc  AGU.TO , 
Mosaic  MOS.N , K+S  SDFGn.DE , Arab PotashCo  APOT.AM  and 
Israel Chemicals  ICL.TA . 
    Indian companies could sign contracts for another 3 million 
tonnes in the next few weeks, if other suppliers offer the same 
price, said an official with a Mumbai-based fertiliser company. 
    Rashtriya Chemicals and Fertilizers Ltd (RCF)  RSTC.NS , 
IFFCO and Chambal Fertilisers and Chemicals  CHMB.NS , and Tata 
Chemicals  TTCH.NS  are among the key potash buyers in India. 
    India has nearly 1 million tonnes of carry-forward stocks of 
potash as last year's drought trimmed consumption, Gahlaut said. 
    "Carry-forward stocks and the supply of 700,000 tonnes from 
the new contract are sufficient to cater the demand for next 3-4 
months," he said. 
    India and China, the world's biggest fertiliser consumers, 
usually sign contracts earlier in the year. This year, deals 
were delayed as high stocks held by farmers meant there was no 
rush to agree a deal. 
    India's deal is a rare instance of the country signing a 
potash supply contract with a major producer before China. 
 
 (Additional reporting by Polina Devitt in MOSCOW; Editing by 
Sherry Jacob-Phillips) 
 ((rajendra.jadhav@thomsonreuters.com; +91-22-6180-7153 ; 
Reuters Messaging: 
rajendra.jadhav.thomsonreuters.com@reuters.net)) 
 
Keywords: INDIA POTASH/IMPORTS