UPDATE 1-India cuts potash subsidy by nearly a fifth, to hit imports
* Subsidy cut to keep local price elevated, reduce demand
* Uralkali reps in India now to finalise 1 mln tonnes in deals
* India to import 3.5 million tonnes potash in 2014/15 (Adds quotes, details)
By Rajendra Jadhav
MUMBAI, March 28 (Reuters) - India has cut potash subsidy by nearly a fifth to 9,400 rupees ($160) per tonne for the year starting April in an effort to contain a ballooning fiscal deficit, a government source and an industry official told Reuters on Friday.
A smaller subsidy would keep retail potash prices elevated despite a drop in overseas prices, dashing hopes for a recovery in demand in one of the world's top importers of the fertiliser. Global miners have been banking on Indian imports to help counter a slump in prices.
"The (federal) Cabinet on Thursday approved reduction in subsidy to 9,400 rupees," said a government official, who declined to be identified.
India relies on overseas supplies to meet its entire potash demand. It has accounted for about a tenth of global shipments over the past five years, but its share has been slipping as local prices rise due to subsidy cuts and a weaker rupee.
Reuters exclusively reported last month that India will cut the potash subsidy by nearly a fifth. Continued...