Subsidy cut to cap India's 2014/15 potash imports
* Subsidy cut to keep local prices elevated, demand dampened
* India likely to sign import deals by March-end
* Imports seen at 3.5 mln tonnes in 2014/15-industry official
By Rajendra Jadhav
MUMBAI, March 12 (Reuters) - India's potash imports in 2014/15 are likely to remain squeezed despite a 20 percent drop in global prices as the government's plan to cut subsidy will keep local retail prices elevated, a senior industry official told Reuters in an interview.
The south Asian country fulfils its entire potash requirement through imports and global suppliers were banking on recovery in its demand to counter the slump in prices.
"Since the government is cutting subsidy, I think India can buy around 3.5 million tonnes in 2014/15," said P.S. Gahlaut, managing director, Indian Potash Limited, the country's biggest importer. Indian financial year runs from April to March.
India will cut potash subsidies by nearly a fifth for 2014/15 as the government tries to contain a ballooning fiscal deficit, two government sources and an industry official told Reuters last month.
Higher retail prices have already seen a drop in India's annual potash imports to around 3.3 million tonnes in 2013/14 from 6.3 million tonnes in 2010/11, Gahlaut said. Continued...