PhosAgro has concluded a three year memorandum with Indian Potash on their intention to deliver 1.35 million tons of phosphoric fertilizer over the course of three years, from 2015 to 2018, announced the company’s press release which was cited by Interfax.
PhosAgro expects a further increase in the cost of fertilizers on the Indian market from the current level of $485 per ton on the background of increasing demand due to an increase in subsidies to farmers and low stocks.
The company expects that this year India will increase its imports by more than 60% to 6.5-7 million tons. Since the beginning of the year India has already purchased 2.2 million tons of Diammonium phosphate (DAP) in the first half of the year which is 900 000 tons more than in 2014.
Over the last two years, PhosAgro has exported practically no fertilizer to India on the background of weak demand. At the beginning of the year, the company concluded a contract for 500,000 tons in addition to a three year agreement.
"This year, after being practically absent from the Indian market for two years, caused by a sharp drop in prices, we took the decision to renew deliveries of our products to this country. The Indian fertilizer market at present is showing a stable demand for NPK/DAP fertilizers", said PhosAgro General Director Andrei Gurev commenting on the agreement in the press release.
We note that at the start of May, Uralkali came to an agreement with IPL to deliver 800,000 tons of potassium chloride by 2016. Uralkali Trading will carry out deliveries from May 2015 to March 2016. The price of the exported fertilizer to India is $10 per ton higher under CFR conditions than was stipulated in the contract from the previous year.
“It is a compromise that reflects the current situation on the global potash market. The contract, without a doubt, will be one of the determining factors in the industry, stimulating the demand for potash fertilizers,” said Uralkali General Director Dmitry Osipov.
Uralkali manufacturing assets include five mines and seven processing plants located in Perm region.
Indian Potash Ltd is India’s largest mineral fertilizer importer with an annual import volume of more than 10 million tons.
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