India in talks on multi-year fertiliser import deal with Russia -sources

Madras Fertilizers

03/02/2022 13:42

By Nidhi Verma, Rajendra Jadhav and Polina Devitt
    NEW DELHI/MOSCOW, Feb 3 (Reuters) - India is in its first
government-to-government negotiations with Russia for the
long-term supply of fertilizers, government and industry sources
said, hedging against geopolitical instability and high global
prices.
    India is a top importer of urea and other soil nutrients
needed to feed its huge agriculture sector, which employs about
60% of the country's workforce and accounts for 15% of $2.7
trillion economy.
    Fertilisers Minister Mansukh Mandaviya along with officials
from Indian fertilisers companies will visit Moscow later this
month or early March to discuss the deals with Russian trade
minister Denis Manturov, the government sources said.
    This is the first time in 30 years that the Indian
government will be involved in multi-year import negotiations
for fertilizers. In 1992, India came out with a policy
announcing deregulation of soil nutrients except urea.
    The sources said India is aiming to lock in 1 million tonnes
a year each of di-ammonium phosphate (DAP) and potash; and about
800,000 tonnes a year of a mix of nitrogen, phosphorus,
potassium (NPK). 
    "Pricing and firm quantities are yet to be fixed ... Our
focus is to have secure supplies at reasonable prices. Since the
(Indian) minister is involved so we hope to get some discount,"
said one of the sources.
    India's Rashtriya Chemicals and Fertilizers Ltd  RSTC.NS ,
National Fertilizers Ltd  NAFT.NS , Madras Fertilizers Ltd
 MDFT.NS , Fertilisers And Chemicals Travancore  FCTL.NS  and
India Potash Ltd are expected to sign a 3-year deal for DAP,
potash and complex fertilisers with Russian companies including
Phosagro  PHOR.MM  and Uralkali  URKA.MM , the sources said.
    Indian companies already have an import deal for 400,000
tonnes of DAP with Phosagro and they are expected to lift the
entire contracted volumes by June, coinciding with end of the
current export quota set by Moscow.  urn:newsml:reuters.com:*:nL1N2RU14O
    "We are currently in negotiations with our Indian colleagues
to extend and develop our existing agreements for the supply of
Phosagro's mineral fertilisers," Phosagro told Reuters. Uralkali
declined to comment.
    In 2021 some states in India faced shortages of fertilisers
after export restrictions by China and a record surge in global
prices, triggered by factors including high energy costs and
Western sanctions against Belaruskali, the world's
second-largest potash producer.
    India allows companies to fix the retail price of
fertilisers. But to ensure that farmers are not hit by a rally
in global prices, New Delhi provides a subsidy to fertiliser
companies to keep an indirect check on retail prices.
    Indian companies and fertiliser ministry, and Russian trade
ministry did not respond to Reuters request for comments.
    An Indian fertilisers company official who negotiates
overseas deals, said his firm is planning to sign an initial
deal for long-term supplies from Russia.
    "Fertiliser prices are rallying in global market. India is
one of the biggest importers in the world and Russia is our key
supplier. Our attempt is to insulate farmers from price
volatility through long term supply contracts," he said.
        

 (Additional reporting by Gleb Stolyarov; editing by David
Evans)
 ((nidhi.verma@thomsonreuters.com; +91 11 49548031; Reuters
Messaging: nidhi.verma.thomsonreuters.com@reuters.net))