Russia's Phosagro will not renew deal to sell India fertiliser
By Victoria Andreeva
MOSCOW, July 11 (Reuters) - Russian fertiliser company Phosagro has no plans to renew a contract to supply India, the world's largest phosphate consumer, because it is offering too low a price, a senior executive said.
Analysts estimate that Phosagro, the world's No.2 producer of phosphate fertilisers, supplied around 400,000 tonnes of dimmonium phosphate (DAP) to India under its 2012 contract.
India, seeking to boost rice crops to feed its growing population, traditionally sets a floor on prices of fertilisers such as DAP.
Last year Phosagro's revenue from India amounted to around 7.5 billion roubles ($230 million), down from 12 billion roubles in 2011.
The price offered by New Delhi is too low to resume deliveries, Deputy Chief Executive Andrei Guriev said in an interview. He cited spot fertiliser prices in India at around $485 per tonne at the beginning of July, compared with contracts signed not long ago for $515.
"India is a specific market where the buyers are strongly consolidated and fertiliser producers find themselves facing a monopsony (buyer's market)," he said in an interview.
The company plans to redirect those volumes to Russia's domestic market, which it sees as a priority, and also to Southeast Asia, Latin America, Africa and Europe, said Guriev, son of Phosagro's billionaire majority owner Andrey Guriev.
In May, rival Phoschem, which exports North American fertiliser for Mosaic Co and Potash Corp of Saskatchewan , agreed to sell 400,000 tonnes of DAP to India, but did not reveal the exact price. Continued...