India may set potash benchmark prices as China bolsters domestic production

NEW DELHI: India could soon set potash benchmark prices for the world, as China bolsters domestic production reducing dependence to import the key fertiliser. With no local reserves of potash, India’s expected growth rate of consumption, nearly twice as much as that of the global rate, should allow it to establish benchmark prices, says the world's second largest potash producer Urakali.

Speaking to journalists, Urakali CEO Vladislav Baumgertner said: “This year we see the market growing and believe prices will also grow, so it was beneficial to have semi annual contracts, but we would like to have at least one market on an annual basis.
Annual contracts are good option for us for India but not for China, where it could be semi-annual or quarterly pricing." Over the last seven years, China has strengthened domestic production to 6 mt of its total consumption of 11mt. It plans to further increase that to 8 mt over the next few years.

According to Urakali, the Indian market is expected to grow at 5-7% annually, against a global rate of 3-3.5%. The 6 mt Indian market should reach 10 mt in 7-9 years. Urakali supplied 1.6 mt of muriate of potash to India in 2011 through its marketing arm Belarusian Potash Company, which it co-owns with neighbouring potash maker Belaruskali