KOLKATA (miningweekly.com) - Some leading global potash miners have agreed to start negotiations on offering discounts on potash exports to India, after the Asian major hardened its stance on extending its current ‘import holiday’.
“India being among the largest importers of potash, its staying out of the global market has definitely impacted suppliers. The Indian government’s hardening of its stance to continue staying out of the international market for more time may have prompted global potash miners to come back to negotiations on prices,” an official in India’s Chemicals and Fertilizers Ministry said.
“Russian potash miners Urakali and Belaruskali of Belarus have communicated to Indian potash importers to start price negotiations and their willingness to offer discounts on their export offer price,” the official said.
“We can be flexible on prices to Indian farmers but this flexibility is limited by our policy to have balanced pricing across all our markets,” an executive of Belaruskali was quoted saying in the local Indian media.
“Indian potassic fertiliser consumption was down 23% this year on high prices, [and] being replaced by cheaper urea. Hence there is no urgency in import of potash. The welcome sign is that Indian importers’ demand for price reductions of 15% to 20% on the spot price of $500/t is at least being heard now,” the Ministry official said.
In view of the fall in demand for potassic fertiliser, the Indian government last month decided to continue with the potash 'import holiday’ beyond September 2012, unless there was a downward price correction by potash miners or producers of finished fertiliser.
Companies authorised by the Indian government to import potash had negotiated for October to December shipments at $470/t and January to February shipments at $520/t. However, no orders have been booked since the weakening of the rupee rendered imports at such prices unviable to farmers.
Ministry officials have suggested that global potash suppliers should benchmark their India offer to their China offer, as opposed to the Japan offer, since that country only imported small volumes. Both Chinese and Indian import volumes were estimated at around five-million to six-million tons a year.
Potash miners have been unwilling to change the base benchmark pricing, but have started talks on discounts, which could be a starting point, the official added.
Meanwhile, an Indian consumer advocacy organisation has filed a complaint against seven global potash companies before the Competition Commission of India seeking investigations into price cartelisation and the initiation of action on relevant laws that would see the Commission empowered to take action against acts outside India's territory that have an adverse impact on price competition in the domestic market.