MUMBAI, July 11 (Reuters) - Israel Chemicals (ICL) will ship potash to India at the same decade-low price agreed by another seller last month, two sources said, as global supply of the crop nutrient exceeds demand.
ICL’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 around 600,000 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. In the last week of June, Belarus agreed to supply 700,000 tonnes of potash at the same rate to India, one of the world’s top buyers of the material.
India’s potash contract with Israel Chemicals will likely be announced on Monday, the sources said.
Both IPL and ICL declined to comment on any potash contract.
Uralkali, the world’s biggest potash producer, has said the price agreed by Belarus was too low and it was not yet ready to sign a potash supply contract with India.
But Indian officials have said $227 was the new benchmark. Prices were as high as $490 three years ago.
“Already two producers have agreed this price. It is not possible for India to offer a higher price,” said one of the sources involved in the latest deal.
India and China, the world’s biggest fertiliser consumers, usually sign contracts earlier in the year. This year, deals were delayed as high stocks held by farmers in the wake of falling prices for agricultural commodities meant there was no rush to agree a deal.
India’s deal is a rare instance of the country signing a potash supply contract with a major producer before China. (Reporting by Rajendra Jadhav; Additional reporting by Tova Cohen in Tel Aviv; Editing by Joseph Radford)