By Rajendra Jadhav
MUMBAI, May 31 (Reuters) - Indian buyers have started
talking with potash suppliers on new import contracts, trying to
settle them at a steep discount to last year's price, two
industry officials told Reuters, as plentiful supplies gave
purchasers new bargaining power.
Contracts signed by India and China are considered
benchmarks in Asia, and are closely watched by other
potash buyers such as in Malaysia and Indonesia.
India typically opens negotiations for imports of the key
fertiliser ingredient in February, aiming to sign new contracts
before the start of the next fiscal year on April 1.
However, India halted potash imports in February this year
and delayed negotiations after successive droughts dented demand
in one of the world's biggest fertiliser consumers. are negotiating with suppliers. Hopefully negotiations
will be over this week," a senior official with an Indian
fertiliser company told Reuters over the phone from Moscow,
where he was attending a conference.
"If negotiations fail this week, then suppliers could visit
New Delhi in June to settle the new contract," he said.
Under the previous contract, India was buying potash at $332
a tonne on a cost and freight basis (CFR).
Indian buyers are seeking a steep reduction as global potash
prices have fallen to their lowest in a decade, weakened by
declining U.S. farmer incomes, falling currencies in consuming
markets such as Brazil and bloated mining capacity.
"Miners have to accept the fact that it is an oversupplied
market. They have to reduce prices to boost the consumption,"
said an official with a co-operative fertiliser company.
India's imports of potash could rise if the suppliers reduce
prices as the monsoon is forecast to deliver surplus rainfall,
the official said.
Monsoon rains in June-September deliver about 70 percent of
the country's annual rainfall and sustain the half of India's
farmlands which lack irrigation.
State-run Indian Potash Ltd, the country's biggest importer,
cut retail prices of muriate of potash for farmers by 1,000
rupees ($15) per tonne to boost the consumption, said P.S.
Gahlaut, managing director of the company.
India imported around 3 million tonnes of potash in the
2015/16 fiscal year that ended on March 31.
Major potash suppliers to India include Uralkali URKA.MM ,
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 .
($1 = 67.2125 Indian rupees)