Indian fertiliser companies finally sign annual potash supply deals with cartels
05 Aug 2011
After a three-month standoff, Indian fertiliser companies have agreed to buy potash at an average price of less than $500 a tonne.
On Thursday, Indian Potash Ltd reached a deal with the Russian cartel Belarusian Potash Co, the largest potash supplier to India, for 1.2 million tonne (mt) of MoP at $490 a tonne for deliveries during August and March on a cost-and-freight (CFR) basis.
Belarusian Potash's previous contract with India, which expired in March, was at $370 a tonne.
Tata Chemicals, Coromandel International, Zuari Industries and Indian Farmers Fertiliser Cooperative signed import deals with Canpotex, the North American potash cartel, for 6.7 lakh tonnes of potash at $470 per tonne for the 1 October 2011 to 31 March 2012 period.
The contracts price of $470 per tonne includes CFR for 50 per cent of the contract volume of 6.7 lakh tonnes for the fourth quarter of 2011 and $530 per tonne CFR for remaining 50 per cent for first quarter 2012.
The deals signed yesterday broke the three-month deadlock after India's potash users failed to reach a supply and pricing agreement with the cartels.