LONDON (ICIS)--Israel Chemicals Limited (ICL) confirmed on Monday it has signed its first agreement to supply potash to India, with additional agreements expected in the coming days.
“The company wishes to update that today the first agreement was signed for the sale of potash to India,” ICL said.
“Additional agreements are expected to be signed in the coming days, and the company will further report once the total amount is agreed upon.”
ICL is understood to have agreed to supply 500,000 tonnes to lead negotiator Indian Potash Limited (IPL) - which will include tonnes to fellow buyers Coromandel and Zuari - at the prevailing price set by Belarus Potash Company (BPC).
In the 2015/2016 fiscal year, ICL committed around 800,000 tonnes to the Indian market.
BPC was the first to agree with IPL at $227/tonne CFR (cost and freight) with 180 days’ credit for 700,000 tonnes of MOP (muriate of potash). The shipment period of the new contract is 1 July 2016-31 June 2017.
With the settlement of Indian contracts, focus is turning to China, the traditional benchmark in the potash industry.
In January, ICL announced it signed framework agreements with its customers in China to supply an aggregate 3.4m tonnes of potash (including options) over the next three years.
According to the release, the selling prices will be established in line with prevailing market prices in China.
“The agreements, which represent a 3% increase over ICL’s previous three-year framework agreements with its Chinese customers, call for the delivery of 1.1m tonnes of potash in 2016, 1.14m tonnes in 2017 and 1.16m tonnes in 2018,” the release from 4 January said.
“Previous framework agreement quantities of 3.3m tonnes (including options) were supplied in full.”
Deals between IPL and suppliers Uralkali and Canpotex are yet to be announced.