Potash prices only going higherDeadlock between Indian buyers, global MoP sellers persists
Published on Tue, Jul 26, 2011 at 16:23 | Source : PTI
Updated at Tue, Jul 26, 2011 at 16:42
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Deadlock between Indian buyers, global MoP sellers persists
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The deadlock between Indian fertiliser firmsand global suppliers of muriate of potash (MoP) over pricing of importsfor this fiscal continues, with the later refusing to sell the farmnutrient at a lower price of USD 470 a tonne.
"There has been no progress between Indian buyers and potashsuppliers on prices for the next round of contracts. Suppliers againthis week confirmed that they will not be able to offer Indian buyersthe same price as that settled in China," UK-based FMB Consultants saidin a latest report.
Major potash suppliers like Canpotex and Belarusian Potash Company(BPC) say that USD 470 per tonne price that has been settled with Chinais "unworkable" for the Indian market as frieghts to India aresignificantly higher, it said.
The FMB weekly report further noted that "there is no immediateurgency for suppliers to finalise further contracts" as major supplierslike Canpotex have sold out for the whole of third quarter and also BPCis now able to sell more easily in European markets following recentlifting of anti-dumping measures on Russian and Belarusian KCI.
"Furthermore, negotiations between Indian buyers and suppliers willnot be helped by recent news reports which suggest the supply from oneof BPC's mine in Belarus may be significantly reduced due to flooding,"he said.
Global suppliers have reported that they have received a number ofenquiries from private buyers in India who have almost no stocksavailable, it added.
According to the FMB report, India's MoP import in May-June of thisyear are estimated to be lower at 1.10 lakh tonne, compared to 15.9 lakhtonnes in the year-ago.
That apart, in South East Asia, the price of USD 510-525 forstandard/granular MoP has been widely accepted, as buyers believe thatthis price will not be available for too long, the report said.
"A USD 30-40 a tonne increase in South East Asia is imminent,according to suppliers, and is likely to be in place for Sepetember-enddeliveries," it mentioned.
Indian importers like IFFCO are, however, of the opinion that theywould at best, consider a price of USD 470 a tonne as the country buys10% of global potash production.
"We do not mind buying potash at USD 470 a tonne, but the globalsuppliers are demanding USD 500, which we cannot accept at any cost. Itis also a matter of India prestige," IFFCO Managing Director U S Awasthihad said recently.
Indian companies want to import potash at not more than USD 420 atonne, which is the government's benchmark import parity price used tocompute the subsidy on potash incorporated into various complexfertilisers.
India does not have any exploitable potash deposits and imports itsentire requirements. MoP imports touched a record 6.4 million tonnes in2010-11.