UPDATE 1-India to cut potash subsidy, hitting demand - sources
* Subsidy to be cut to 9,300 rupees/T for 2014/15 from 11,300 rupees
* Cuts may be approved in a week
* Rising Indian potash prices to curb demand
By Rajendra Jadhav
MUMBAI, Feb 27 (Reuters) - India will cut potash subsidies by nearly a fifth for the year starting in April as the government tries to contain a ballooning fiscal deficit, two government sources and an industry official told Reuters.
A smaller subsidy would push up costs in India, dashing any hopes for a recovery in demand in one of the world's top importers of the fertiliser that global potash miners are banking on to counter a slump in prices.
Russia's Uralkali broke away from trading venture Belarusian Potash Company (BPC) in July, sending potash prices down more than 20 percent since then to around $310 a tonne.
India relies on imports to meet its entire potash demand, which in the current year is 4 million tonnes. Over the past five years it has accounted for about a tenth of global shipments, although its share has been slipping as local prices rise on previous subsidy cuts and on a weaker rupee.
Major suppliers to India include Potash Corp of Saskatchewan , Mosaic Co, Agrium Inc, Uralkali, Arab Potash Co, Israel Chemicals and Germany's K+S AG. Continued...