Minsk, Belarus/Moscow: India is close to signing a potash accord with Belarus, which may signal a recovery in the market for the nutrient this year.
“There is significant progress in talks with India, and we expect that the contract may be signed in June,” the press service of Belarusian Potash Co., a state-run exporter, said by e-mail on Thursday. Belarus’s president, Alexander Lukashenko, said that the accord with India has already been signed.
Potash, one of the three key elements that helps to make plants stronger, is mostly mined in Russia, North America and Belarus. India and China, the two major consumers, usually sign pacts at the start of each year to buy the nutrient from companies including Russia’s Uralkali PJSC and Canpotex Ltd., the exporter for Potash Corp. of Saskatchewan Inc. In 2016, both nations delayed accords because of high stockpiles.
Stocks are now declining, and India may sign deals with producers this month, Vladislav Lyan, chief executive officer at Uralkali Trading, said on a call with investors on Wednesday.
India is likely to reach an accord before China does; this would be the first time this is the case since 2009 and may affect the price of the Chinese contract or delay it as typically India pays more than the biggest Asian economy for the nutrient, according to VTB Capital.
“In any case, an accord with India will be very good for the market,” Elena Sakhnova, VTB Capital analyst said by phone from Moscow. “If an agreement is signed, some market recovery will be possible.” A Chinese pact is likely be postponed to the end of the year, if one is signed at all in 2016, she said.
Chinese potash inventories declined to 4 million metric tons as of the end of May from about 6 million tons at the start of the year, Uralkali said. The deal with China may be signed at the end of summer or start of autumn, the company’s management said on Wednesday. The nation is likely bidding for potash below $200 a ton, RBC Capital Markets analyst Andrew Wong said on 3 June. In 2015, it agreed to buy at $315 a ton.
Lukashenko also said that Uralkali is ready to restore a potash sales alliance, which broke up in 2013 and led to the global decline in prices. Belarus isn’t against the alliance, but will only participate on its own terms, Lukashenko said during All-Belorussian People’s Congress in Minsk. Uralkali’s press service declined to comment. Bloomberg