04 May 2011 17:09 [Source: ICIS news]
LONDON (ICIS)--Signs are starting to emerge that India will have to re-enter potash fertilizer contract negotiations before June, industry insiders said on Wednesday.
The source, a seasoned industry professional based in ?xml:namespace>
“No scientist here would ever say potash is not a requirement,” he said, stating he hoped Indian stubbornness wouldn’t “muddy the waters” of the negotiation process.
Confirmation came during a conference call to investors last week by Bill Doyle, CEO of global fertilizer company PotashCorp.
“It’s important to remember that
A few weeks ago, Indian importers claimed potash inventories could last through the kharif, or summer planting season. Traders, however, wrote this off as a negotiating tactic.
Russian-based producers say the last MOP shipments from previous contracts will arrive and be used by June, indicating
Acknowledging the previous $390/tonne subsidy was not in line with the market, the Indian government recently raised the subsidy to $420/tonne CFR for MOP. Buyers, however, still want producers to give them roughly a 10% discount on the international price.
Doyle told investors a major buyer – New Delhi-based Indian Farmers Fertiliser Co-operative Limited (IFFCO) – had discussed a price at $450/tonne CFR, or roughly a 10% discount on international prices, but that level was not yet agreeable to its marketer Canpotex.
BPC says it has offered a price closer to the $500/tonne CFR mark plus credit, but it was refused.
Industry insiders say local demand can support the high prices of today’s market.
This, combined with the healthy monsoon season predicted by India’s official weather service, boosts farmers’ potential for a robust crop yield that could surpass last year’s, the source added.
($1 = €0.67)
For information on potash and other fertilizers, visit ICIS Pricing Fertilizers
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