Amid declining stocks of potash and rising demand for the fertiliser, the government has decided to use official channels with Canada to import about two lakh tonnes (lt) of Muriate of Potash (MoP) immediately and to explore the possibility of entering into a five-year contract at competitive prices.

MoP is used mainly in horticulture crops, apart from wheat and paddy.

On December a meeting was held between Fertiliser Secretary Rajesh Kumar Chaturvedi and India’s High Commissioner to Canada Ajay Bisaria, with importers of potash also present.

“It was decided that the Department of Fertiliser will approach Indian High Commission in Canada to take up the matter of supply of potash at reasonable prices,” the ministry said in a statement. Besides short-term supplies and long-term agreements, the government will also try to explore joint venture possibilities with companies in Canada.

Price factor

“The main challenge is price factor and the government wants to highlight how Indian companies are at a disadvantage in sourcing potash since producers sell the crop nutrient to China at lower rates,” a source said. Prices of MoP went up to $445 (CIF) by September from around $280/tonne during June, and currently exporters are asking for $600, sources said. Experts said global fertiliser prices are unlikely to see any drop until the second half of 2022, while rates would continue to be volatile during the first quarter next year.

Decline in stocks

Meanwhile, official data show that the MoP stocks in the country have declined to 5.72 lt as of December 17, from 6.2 lt as on November 30 while the sales were about 5.96 lt so far this season, starting October 1.

During December 1-17, only about 60,000 tonnes of MoP could be from fresh supplies while about 50,000 tonnes were sold from the carryover stocks. Though it looks better from November supply of 80,000 tonnes for the entire month, the overall monthly demand is quite higher and will increase further in January.

Unless MoP is augmented, it will be difficult to meet the demand as the rabi season alone needs about 18 lt, industry experts said. The government’s estimates of MoP requirement for this year’s rabi season is lower at 16.86 lt.

The AIADMK’s former interim general secretary VK Sasikala on December 13 had urged both the Centre and State governments to take steps to reduce the price of MoP and overcome the problem of its shortage. She had alleged that per bag MoP (of 50 kg) had gone up to ₹1,700-1,800. Previously retail prices of MoP were used to be around 1,050 a bag before global price surge.

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