Minsk/Mumbai: Belarus has agreed to sell potash to India at the lowest price in a decade and about a third less than last year’s level as global supplies of the crop nutrient exceed demand.
One of India’s biggest fertiliser importers, Indian Potash Limited (IPL), has agreed to buy 700,00 tonnes of potash at $227 per tonne on a cost and freight (CFR) basis with a credit period of 180 days, Belarusian Potash Company, Belarus’s state-controlled trader of this fertiliser, said in a statement on Monday.
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 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.
The Indian buyers confirmed the contract signing. The price is sharply down from last year’s price of $332.
“After lengthy negotiation Belarus has agreed to supply potash at $227,” one of the Indian buyers told Reuters.
IPL said it would pass on part of the benefits from lower import prices to farmers by slashing the retail price of potash by Rs 4,000 per tonne ($59).
The contract price is fair and reflects the current conditions in the global potash market, Elena Kudryavets, director general of Belarusian Potash Company (BPC), said in a statement.
“The contract reflects interests of producers, importers and consumers of potash fertilisers,” she added.
Belarus’ contract price is likely to become the benchmark for other suppliers to India, such as the powerful North American trading group Canpotex Ltd, owned by Potash Corp of Saskatchewan, Mosaic Co and Agrium Inc.
“Since one supplier has agreed on the price, others have to follow. Uralkali is likely to be next to sign the deal, followed by Canpotex,” said a senior official at a leading Indian fertiliser company.
Russia’s Uralkali, the world’s largest potash producer, was not available for comment.