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

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.
"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.