Belarusian Potash Company (BPC) said today it has signed the potash supply contract with Indian Potash Ltd. (IPL), India’s biggest potash importer, at $227/mt CFR with 180 days’ credit for potash deliveries between July 1, 2016 and March 31, 2017. BPC has agreed firm volumes of 700,000 mt with IPL, with shipment at the new price to start from July 1.
The contract delivery price agreed marks a $105/mt reduction on last year’s contract price of $332/mt CFR with 180 days’ credit for potash deliveries to India in fiscal 2015/16. Indian buyers subsequently secured a discount &ndash believed to be in the order of $15/mt – on the 2015/16 contract price on all contract shipments loading since Oct. 1, 2015. IPL, and possibly other buyers, was said to have secured a further discount on outstanding contract volumes after imports resumed in March following “an import holiday” called by the country’s government in mid-February.
Indian buyers, according to some sources, had been targeting a price below $200/mt CFR for new 2016/17 contract supplies, although this could not be substantiated.
“Signing this contract will promote the stability of the Indian market, which is an important strategic area to us. The contract reflects interests of producers and importers, as well as end-users of potash fertilizers – Indian farmers that make a significant contribution to the development of global agriculture,” BPC director general Elena Kudryavets said in a statement. “The price of the new contract is fair and reflects current market conditions of the global potash market. The conclusion of an agreement with IPL will undoubtedly be one of the main drivers for the industry’s development; it will positively affect the global potash market in the near future, add more certainty to all stakeholders and boost demand for potash fertilizers.”