Low demand from India to hit global potash shipments in 2012.

NEW DELHI: Global shipments of the key fertiliser potash are expected to decline by 3.6 per cent to 53 million tonnes in the current calender year on account of reduced demand from India among other factors, World's largest producer of the crop nutrient Potashcorp has said.

Worldwide export of muriate of potash (MoP) stood at 55 million tonnes in 2011.

According to Canada-based Potashcorp's latest market analysis report, the other reasons leading to a fall in export of the soil nutrient are low demand in North America, Brazil, Indonesia and Malaysia.

"Global potash shipments for 2012 are forecast at approximately 53 million tonnes, down from over 55 million tonnes in 2011, primarily due to the reduction in distributor inventories carried over from last year and lower Indian demand," Potashcrop's report said.

Demand in North America has been impacted by cautious purchasing behavior and a reduction in inventory levels during the first half of the year. Inventory in other key spot markets such as Brazil, Indonesia and Malaysia are expected to be below levels at the start of the year, the report added.

"Potash shipments to India declined drastically in 2012 primarily due to its fertiliser subsidy changes, which are leading to higher retail prices and reducing demand in the short term," it said.

Potashcorp expects demand in India to rebound in 2013 on the back of agronomic needs, while the magnitude of increase will be influenced by the government policy.

Potash imports to India were around 4.3 million tonnes in the 2011-12 fertilizer year (April-March). Belaruskali Potash Company (BPC) was the largest supplier with nearly half of the market share. Israel and Canada were also key suppliers in this market, the leading global supplier said.

India is the world's second-largest fertiliser consumer, accounting for approximately 16 per cent of total consumption.

Industry body Fertiliser Association of India (FAI) has also said the import of MoP is expected to decline due to low sale of the soil nutrient.

FAI Chairman A Vellayan said sale of MoP and di-ammonium phosphate (DAP) have been hit due to high prices of the crop nutrients, delayed monsoon rains and low prices of urea.

"Farmers opted for urea due to its low price hurting the sale of fertilisers. This will also impact the fresh contracts to be signed for DAP and MoP," Vellayan, who is also the Chairman of the Murugappa group that owns leading fertiliser producer Coromandel International, said.

FAI expects the country to import about 2.5-3 million tonnes of MoP in 2012-13 fiscal, he added.

India imported 2.68 million tonnes of MoP in the last fiscal and 4.5 million tonnes during 2010-11 fiscal.

Source : economictimes.indiatimes.com