Following Russia-based Uralkali refusal to reduce the Muriate of Potash (MOP) prices, Indian fertilizer companies on Wednesday decided to slash the imports by 35 per cent to reduce their payouts.
Cooperative fertilizer enterprise, Iffco have decided to reduce the MOP imports by 35 per cent in ‘token protest’ against price arm-twisting by Uralkali. Largest importer, Indian Potash Limited (IPL) is likely to follow suit.
“There won’t be a price revision, we cannot offer discounts for individual markets while global demand is high and our plants are working at full capacity,” Uralkali’s chief executive officer Vladislav Baumgertner said in a statement on Wednesday. Baumgertner added that it is ‘misinterpretation’ to assume those numbers indicate a reduced price of $ 509 a tonne.
US Awasthi, managing director of Iffco told Financial Chronicle that his cooperative would reduce potash imports by around 35 per cent. In 2010-11, Iffco imported about one million tonnes of potash. In the current year, Iffco had planned to import similar quantity of potash.
“In a free market scenario, suppliers may understand the buyers position and adjust the prices accordingly. There is already reduction in demand due to doubling of fertilizer prices. Iffco has the information that as a consequence of this, farmers have reduced consumption of potash and phosphate based fertilizers,” Awasthi added.
Depreciating rupee has lead to increase in import cost translating into higher price for end-user. Rupee has recently hit its all-time low of Rs 52.73 against dollar in an intra-day trade on November 22. On Wednesday, the domestic currency inched up 0.37 per cent against the greenback to close at Rs 52.21.
Iffco demanded cut in potash prices by at least $36-40 per tonne. India imports potash from global suppliers such as Uralkali, Belarusian Potash Company and Canada’s Canpotex.
“We had requested all our suppliers to reduce the prices thinking they will understand our situation in the current economic scenario and some suppliers did accept our request and slashed the import prices also,” Awasthi said.
Source : mydigitalfc.com