Photo by: Bloomberg
KOLKATA (miningweekly.com) - Indian potash imports are poised for a significant boost in 2014 as the sector saw a flurry of activity to clinch contracts at sharply reduced prices ranging between $320/t to $325/t, which was substantially lower than the $427/t mark recorded last year.
According to officials in India’s Department of Fertiliser, the country was expected to import 3.5-million tonnes of potash during 2014/15 and domestic fertiliser producers were expecting substantial savings from lower potash offers, largely from Russian Uralkali.
Apart from the sharp fall in potash offers from Uralkali and Belaruskali, of Belarus, following the break-up of the cartel between the two, the potash import bill would be further reduced by the sharp appreciation against the dollar of the Indian rupee.
The Indian currency, which was pegged at around Rs60.59 against the dollar on Monday, had appreciated 3.15% against the greenback during January to March in sharp contrast to last year when the local currency had hit a historic low of Rs68.36 to the dollar.
A press release from producer India Potash said that the company had signed a supply contract with Uralkali for the import of 800 000 t of potash at a rate of $322/t, during the current fiscal period.
Between April 2013 and January 2014, Indian potash imports were about 3.1-million tonnes, of which 2.5-million tonnes was imported at $427/t, while the balance had been contracted at $369/t, the official said.
A government official said that the government was closely tracking potash imports by private fertiliser producers as contracts at a lower price would enable the government to cut government subsidies for potassic fertilisers.
The government incurred about $642-million on muriate of potash in paying a subsidy of around $176/t on the retail price of the fertiliser but it would take some time to reduce the subsidy bill based on lower potash import prices contracted for the full fiscal 2014/15.
The Department of Fertiliser would also take some time to estimate the lower potash subsidy to be offered to producers, as this could be finalised only after the new Indian government assumed charge once the national elections were over in mid-May, the official said.