Indian potash imports will likely increase to a four-year high of about five-million tonnes in the 2015 financial year, which started on April 1. This will be the highest level of imports since 2011, when India went into a self-imposed “potash import holiday”.
With the Indian rupee stabilising and the rise in domestic potash prices checked, farmers’ consumption of the nutrient was seen to be on an upward curve, resulting in the likelihood of higher imports during the current year, an official in the Department of Fertilisers said. However, importers are expected to conclude transactions at a maximum of $322/t on a cost-and-freight basis.
Government-owned trading houses MMTC Limited, STC Limited, and India Potash Limited were designated authorised potash importers. The government subsidised the retail price of potash through part reimbursements to potassic fertiliser manufacturers. However, for 2014/15 the government cut the subsidy by 20% to a maximum of $151/t resulting in a rise in retail price and a drop in consumption during the year.
The issue at hand for importers was the differing trends in offers, which saw potash exporters in Russia and North America seeking an increase over previous average offers, whereas exporters like Belarusian Potash Company Limited (BPC) were willing to keep offers in check, the official added.
Citing recent reports in local media, the official said that indications were that BPC in its offer to China earlier this month had increased offers by $10/t to $15/t to around $315/t while other potash producer exporters had been seeking a hike in the range of $25/t to $30/t for exports to China.
He said that this was a favourable indication for Indian importers as offers to China set the benchmark and export offers to India was normally marginally higher, factoring in higher freight rates, with an import ceiling set at $322/t being "realistic".
The government was expected to maintain a subsidy on potassic fertilisers at $151/t, and if exporters declined to maintain offers at previous year’s levels, the government would have no other option but to reduce imports as retail prices would increase and the upturn in demand would be reversed, the official added.
Source:miningweekly.com
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