Fertilizer buyers in India are not expected to sign any new potash contracts until after harvest finishes in the country, said the head of one of India's biggest fertilizer makers, Indian Farmers Fertiliser Co-operative (IFFCO). The earliest India would buy is in December.
IFFCO said it would not know how much potash it will need from Canpotex and Belarusian Potash Company until after the harvest wraps up. IFFCO buys nutrients, including potash, to make into fertilizer products to sell to Indian farmers. The company wants to wait until farmers have a chance to evaluate their soils after harvest is finished.
"It all depends upon completion of our season sometime in November or early December," said U.S. Awasthi, managing director of IFFCO, in an interview with Reuters from the eastern Canadian province of Quebec. "We (will) know really how much product is there and how long it's going to last."
Awasthi told Reuters that the biggest impediment to negotiating contracts is soft demand from farmers. India will need to pay significantly less than the $490 per tonne of potash that it paid for its most recent contract with Canpotex, which expired earlier this year, he said, before saying later that it's "guesswork" to predict prices.
Weak demand from India and the country’s decision to not sign any new contracts until December has left a significant amount of potash inventory in the pipeline. In addition, China has been in negotiations for its potash contract. Global contracts with China and India, two of the largest consumers of potash, help set world prices and impact prices in the United States.
Until India decides how much potash it needs, potash prices are likely to remain sluggish in the United States with ample supply available for fall nutrient application.