India Inc's resistance to global potash cartel thins out

NEW DELHI: A few dollars more than what China paid for its imports and India could have secured all the potash it wants for the season. But Indian industry, which has not renewed its import contract with top global suppliers since April under a self-imposed "potash holiday" , is digging in its heels, insisting that "no way" will they let China get the better deal.

However, there are indications that the "potash holiday" may be wearing thin. Negotiations on imports have been quietly on. A Russian supplier is said to have quoted a price of $500 per tonne to India against China's $470/tonne. In end June, Belarusian Potash Company, the agent for Uralkali and Belaruskali, sold potash to two Chinese fertiliser importers at prices $70/t higher (at $470/ tonne C&F ) than in the first half of the year.

"We even agreed to pay $470/tonne but suppliers were insisting on $500/t. We are among the world's two biggest importers. The cartel cannot be allowed to dictate prices to us; after all we buy around 5.5mt annually which is roughly 10% of the total production," Iffco MD US Awasthi said.

In May, after its late April 2 year "potash import holiday" decision, industry asked supplier Canpotex for a 10% discount on potash price but failed to make a dent. Canpotex, which controls around one third of the global potash capacity, has in the past been accused of price cartelisation. FAI DG Satish Chander held, “they said supply is short and demand is high, pushing up prices.

They should realise that they will lose the huge Indian market. Maybe it's a good decision to go easy on potash use over the next two years. That will reduce demand and hopefully, push down prices.” Both Awasthi and Chander contend that the Indian soil has "enough" potash to last another two years without exhorbitantly priced imports, given the imports of 6mt last year.