India seeks potash bargain after Belarus-China deal
By Rajendra Jadhav
MUMBAI, April 1 (Reuters) - Belarus' deal to sell potash to China at a lower-than-expected price has prompted India to seek a similar bargain ahead of the signing of new contracts this month, a move that could hit spot rates already under pressure due to stiff competition.
Belarusian Potash Company (BPC) last month agreed to raise the price of potash exports to China, the biggest consumer and which sets the benchmark, by $10 to $315 per tonne, undercutting Russian and North American rivals who were negotiating for a hike of $25-$30.
India, which imports all its potash needs, bought the crop nutrient at $322 per tonne on a cost and freight basis last year, the lowest level in seven years. It is seeking to keep the price at the same level this year.
India usually pays slightly more than China due to additional freight and as it buys in small consignments.
"The Chinese deal has highlighted the oversupply in the market," said P.S. Gahlaut, managing director of state-run Indian Potash Ltd, the country's biggest importer. "As far as India is concerned we cannot afford a price rise."
Officials from Russia's Uralkali, the world's largest producer, are expected in India in the third week of April and any supply agreement around last year's price will put pressure on spot prices that collapsed after Uralkali broke away from a joint trading venture with BPC in 2013.
Spot prices are trading around $330 per tonne, down nearly 18 percent since the breakup of the BPC, amid competition between global producers who had previously maintained high discipline on pricing.
Apart from Uralkali, Canada's Potash Corp of Saskatchewan and Agrium Inc, U.S.-based Mosaic Co, Germany's K+S AG, Jordan's Arab Potash Co and Israel Chemicals supply the crop nutrient to India. Continued...