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

Tue Jun 28, 2016 4:18am EDT
 
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By Rajendra Jadhav

MUMBAI, June 28 (Reuters) - Leading global potash producers, including Russia's Uralkali, 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.   Continued...