LONDON (ICIS)--Following “challenging and lengthy” talks, the Belarusian Potash Company (BPC) has signed an agreement with Indian Potash Limited (IPL) for the supply of potash between September 2018 and June 2019, the producer said on 25 August.
BPC will supply potash to the Indian fertilizers major at $290/tonne CFR (cost and freight), with 180 days’ credit.
Under the previous agreement between the two producers, potash was supplied at $240/tonne CFR.
“The upward adjustment in the amount of $50 [/tonne] is fair and reflects the current market conditions and actual perspectives. The conclusion of this agreement will undoubtedly become a new positive driver for the mineral fertilizers industry,” said BPC.
“The volumes are comparable with the same period of the previous contract year.”
While BPC did not disclose expected volumes for the deal with IPL.
In September 2017, the Belarusian state-run news agency BelTA said a previous memorandum of understanding (MoU) signed between BPC and IPL estimated that around 4m tonnes of potash would be exported to India during the period 2018-2023.
With no domestic potash production, India’s vast agricultural industry is entirely reliant on imports of the key crop nutrient to meet its needs.
“As both parties understand the importance of this contract, not only for the Indian market but for the whole world's potash market, BPC and IPL were able to reach a compromise,” said the Belarusian producer.
Global potash prices are expected to increase in coming months.
Earlier in August, long-term contract price discussions for China and India portrayed sellers eager to agree at around $300/tonne CFR for muriate of potash (MOP).
For now, buyers disagree, but most potash sources expect prices to increase between $30-70/tonne CFR.
IPL had not responded to a request for comment at the time of writing.
Pictured: A potash mine in Belarus
Clarification: Clarifies contract dates in introduction