KOLKATA (miningweekly.com) – Indian imports of potash during the current financial year are expected to fall by 5% to 6% in the wake of a government cut in subsidies and the rapid depreciation of the local currency.
According to government officials in the Agriculture Department monitoring fertiliser demand and availability for the new crop sowing season ahead of monsoon season next month, the retail price of potassic fertiliser will surge in wake of lower subsidies available from the government.
At the same time, the country’s dependence on potash imports, the Indian rupee rapidly depreciating against the dollar at close to the Rs70-a- dollar mark, coupled with recovery in the international price of potash, will fuel the landed cost of the fertiliser input, the officials said.
Total Indian imports of potash during 2017/18 were estimated at 4.6-million tons, up 12% over the corresponding previous financial year, but the trend was forecast to be reversed in the current year with imports expected to dip 5% to 6%, the officials added.
At the start of the current financial year on April 1, 2018, the Indian government pruned the subsidy offered on the retail price of potash to Rs11.12/kg, from Rs12.39/kg offered during 2017/18.
Indian imports of potash are mandatorily routed through designated companies and officials in one importing company said that neither importers, nor fertiliser retailers were in a position to absorb the double impact of lower subsidy and weak local currency and the resultant higher retail price would lead to a sharp fall in demand.
The government officials warned that potash imports could fall beyond current estimates if the Indian rupee, currently pegged at Rs68.13 a dollar, breaches the Rs70-a-dollar mark, as present import estimates were done on the basis of current exchange rates.
Primary Indian imports are sourced from producers like Urakali, Potash, Mosaic, K+S, Arab Potash and Israel Chemicals.
Industry sources said that current offers of potash was being seen at around $226/t free-on-board, but none of the designated importing agencies were reported to have concluded any significant transactions in the current financial year.
Local importing agencies fear that prices could see a further surge in view of reports of fertiliser shortage in China.