New Delhi: India may boost potash imports as forecasts for a return of normal monsoon rain this year bolsters demand prospects for the soil nutrient, the country’s biggest buyer said.
Purchases may jump as much as 29% to 4.2 million metric tons in the year that began on 1 April from a year earlier, P.S. Gahlaut, managing director of Indian Potash Ltd., said in an interview in New Delhi on Thursday. Indian buyers will seek a cut in prices as strengthening dollar makes imports expensive, Gahlaut said.
Indian Potash will begin talks with suppliers including Uralkali PJSC, Potash Corp. of Saskatchewan Inc. in June as China is expected to finalize its import contracts by end of May, he said.
Importers led by Indian Potash paid an average $295 to $300 in cash for a ton of potash in 2015-16, Gahlaut said. Shipments dropped 23% to 3.25 million tons in 2015-16 from a year earlier after the first back-to-back shortfall in rain in the last three decades hurt crops and demand for fertilizers, he said.
Monsoon rainfall is seen at 106% of the 50-year average of 89 centimeters (35 inches) this year as the El Nino that often triggers dry weather weakens, the India Meteorological Department said 12 April.
“We will ask for a lower price as a strengthening dollar and drought reduced demand for potash last year,” Gahlaut said. “Dollar is still expensive. We are keeping a close watch on Chinese contracts.”
The Chinese contract price, which last year was $315 a ton, traditionally sets a benchmark for suppliers and buyers around the world. Supply deals with China and India are normally signed with companies including Uralkali, Belaruskali and Canpotex Ltd., the exporter for producers such as Potash Corp., at the start of the year.
The price of potash, which strengthens plant roots and boosts drought resistance, is down at less than half its 2009 peak amid a supply glut caused by weak demand and the addition of new production capacity. Potash Corp., the world’s second-largest producer of its namesake fertilizer, cut its full-year earnings forecast after prices declined and China delayed signing a key supply contract, it said Thursday. Bloomberg