MUMBAI, July 18 (Reuters) - German potash miner K+S will ship potash to India at the same decade-low price that other sellers to the country have agreed to, three industry sources said on Monday, at a time when global supply of the crop nutrient is exceeding demand.
K+S’s decision could pressure other key producers such as Russia’s Uralkali and North American trading group Canpotex Ltd, owned by Potash Corp of Saskatchewan , Mosaic Co and Agrium Inc, to consider offering potash at similar prices.
Indian Potash Ltd (IPL), one of the country’s biggest fertiliser importers, will buy 125,000 tonnes of potash at $227 per tonne on a cost and freight (CFR) basis with a credit period of 180 days, said the officials, who declined to be named as the contract has not been officially announced.
The price is a third lower than last year. Belarusian Potash Company (BPC) and Israel Chemicals (ICL) have agreed to supply potash at the same rate to India, one of the world’s top buyers of the material.
Uralkali, the world’s biggest potash producer, has said the price agreed by BPC was too low and it was not yet ready to sign a potash supply contract with India.
But Indian officials said they could not accept a price above $227 a tonne since the country has already bought around 1.5 million tonnes at the price. Prices were as high as $490 three years ago.
“There is no question of raising prices. If other suppliers don’t agree, then we can buy more from Belarus, ICL and K+S,” said a senior official with a state-run Indian fertiliser company.
IPL declined to comment on any potash contract, while K+S was not immediately available for the comment.
Last week, BPC signed an overdue deal with a consortium of Chinese firms to sell potash at $219 per tonne for 2016, a 30 percent drop from last year.
Due to weak global demand, fertilizer miner Mosaic Co has idled production at its Colonsay, Saskatchewan potash mine in western Canada for the rest of 2016. (Reporting by Rajendra Jadhav; Additional reporting by Patricia Weiss in FRANKFURT; Editing by Christian Schmollinger)