India is likely to import up to 5.5 million tonnes (mt) of muriate of potash (MOP) during the current fiscal till March 31, according to Mr Oleg Petrov, Director of Sales and Marketing at Uralkali, the Russian potash major.

“Our expectation is that India will import 5.5 mt, of which 2.5 mt would be supplied by BPC (Belarusian Potash Company, a joint export arm of Uralkali and Belarus' Belaruskali that together control almost 45 per cent of global potash exports)”, he told Business Line over phone from Moscow.

Mr Petrov's statement is significant, considering that the country did not contract a single tonne of imports during April to July, as Indian buyers and global suppliers (including BPC, Canada's Canpotex, Israel's ICL Fertilisers and Jordan's Arab Potash Company) failed to agree on prices.

Impasse resolved

The deadlock was resolved earlier this month, with Coromandel International and Tata Chemicals contracting a total quantity of 0.8 mt from Canpotex and ICL – half of it at $470 a tonne (cost & freight) till December 31 and the balance at $530 for January-March delivery.

Subsequently, Indian Potash Ltd (IPL) entered into a deal with BPC to import 1.2 mt at a flat $490-a-tonne landed price till March 31. IPL has also contracted purchases of one mt from ICL and 0.3 mt from Russia's IPC (IPC, which is another trading arm of Uralkali).

In all, the contracts so far would add up to about four mt, which is lower than the record 6.3 mt that the country imported in 2010-11. Mr Petrov, however, felt that that final figure for this fiscal may touch 5.5 mt.

“Besides IPL, we are in the process of contracting with other buyers, including Zuari Industries, MMTC Ltd, Deepak Fertilisers & Petrochemicals, Nagarjuna Fertilisers and Mangalore Chemicals & Fertilisers. The price would be the same $490”, he added.

The $490-a-tonne rate is below the ruling spot prices of MOP, which range from $510 in South-East Asia to $550 in Brazil and $ 600 in the US.

No extra supplies

“Currently, the market is very tight and there are no extra supplies. Even if the current debt crisis leads to softening of commodity prices (and hence lower demand for fertilisers), I don't see the situation change much”, Mr Petrov claimed.

India and Brazil are the biggest buyers (3.1-3.2 mt each) of BPC/IPC's global potash sales of 17-18 mt.

Regarding Uralkali's plans for India, Mr Petrov said that the company was open to establishing joint ventures for manufacture of complex fertilisers that use potash. “We are talking to a few companies, though it is still at a preliminary stage. Besides, we are also looking at joint distribution of MOP and setting up a port terminal in India”, he added.

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