TSXV:AAA.P - Post by User
Post by
Karmanowon Apr 24, 2011 3:48am
![](https://assets.stockhouse.com/kentico-cms/0341-00/images/Sprite.svg#id_Post_Views_Icon)
698 Views
Post# 18479126
India to Subsidize 86% per tonne++
India to Subsidize 86% per tonne++India is taking a aggressive and proactive actions to ensure that farmers maximize fertilization of all their fields. To accomplish this, the government will be picking up as much as 86% of the price of potash applications...This is a big deal for those countries planning to ship potash to India...I think other countries will take similar interventions to ensure the maximum crop yields are achieved year on year. This is the first official government subsidy for potash and very good news for our business and for
Indian Farmers..they end up paying 14% of the actual cost of a tonne of KCL....so, no reason not to fertilize every acre of arable land. That is millions of acres of land that can be fertilized every year...Right Place...Right Time...One Field at a time.
Karma
India opens door to much higher potash subsidies
Here we go. Despite buzz circulating in recent weeks, India is not actually signing potash supply contracts at $390 per ton of the key fertilizer component. But the real news is even more bullish. What really happened is that India is talking about raising the maximum subsidy it will pay on all potash purchases from a contemplated $350 a ton to $390 a ton. In other words, Delhi is not just locking in potash at $390 a ton -- a little under the current asking price -- but setting an effective floor on prices at roughly where we are now. Expect Indian farmers to pay around $450 a ton next year, with the government picking up as much as 86% of that price. The main reasons for higher potash prices are still the same as before: strong demand and problems with supply. Demand is obvious, with everyone talking about food inflation and crop failure in China. Supply is less monolithic, but boils down to problems at producers -- strikes at ICL, a production halt at K+S and delivery interruptions in Europe -- and declining stockpiles in places like India. Potash suppliers are already sold out for the current quarter.