India to Delay Potash Import Deals on Sufficient Inventory.

 Jan. 6 (Bloomberg) -- India, the world’s third-largest potash buyer, will delay signing new contracts to purchase the soil nutrient until July as inventories help meet farmers’ demand, according to the nation’s biggest importer.

Domestic potash stockpiles may total 2 million metric tons as of April 1, compared with 500,000 tons a year earlier, P.S. Gahlaut, managing director of Indian Potash Ltd., said in an interview in New Delhi today.

“We don’t need any imports in the first half as we will have sufficient opening stocks,” Gahlaut said. “With the government unlikely to increase subsidy, the use of potash may not see any growth.”

A decline in Indian imports may help cool a 39 percent rally in export prices of potash from Canada in the past year and potentially lower earnings of Potash Corp. of Saskatchewan Inc., the largest fertilizer maker, and OAO Uralkali, Russia’s biggest fertilizer maker. Farmers can skip potash use for a year without hurting yields, Gahlaut said.

India’s potash consumption may drop 30 percent to 4.5 million tons in the year ending March 31 on rising prices, Gahlaut said. Prices in India have surged to 11,300 rupees ($214) per ton from 5,055 rupees in March, according to data from the Fertiliser Association of India .

“If there is further price increase by suppliers and rupee weakens, consumption will continue to fall as it becomes unaffordable,” Gahlaut said.

Potash sales dropped 58 percent to 975,200 tons in the seven months ended Oct. 31 from 2.3 million tons a year earlier, according to the fertiliser association. Sales of di-ammonium phosphate and mono ammonium phosphate declined 21 percent to 6.14 million tons during the seven-month period, the data showed.

Source : businessweek.com