India’s potash demand to spur fertilizer sales in 2013

India is expected to lead the global demand for potash, a soil nutrient, according to the chief financial officer of PotashCorp, which held an online question and answer discussion Thursday.

CFO Wayne Brownlee said global potash demand in 2012 is expected to be about 53 million tonnes.

“The question is, how robust is the Indian response going to be in 2013,” he said. “That is going to be the key determinate, but given where grain prices are, food prices are, given the amazing incentive farmers have right now for making a profit in the next 12 months, it looks pretty good.”

Although India is the second largest potash buyer in the world, its sales decreased this year after the government lowered subsidies for potash and phosphate, which made those fertilizers too expensive for many Indian farmers.

In the United States, Brownlee said despite the severe drought throughout most of the country this year, farmers will likely want to maximize profits by boosting plant yields with fertilizer. Although some have projected that fertilizer sales for the fall will be low because some potash may have been left in the soil this year, Brownlee said farmers have a very small “nutrient cushion” after the drought.

Another impact of potash prices this fall will come from China, which is still negotiating a supply contract for the second half of 2012. Brownlee said PotashCorp was unsure if China would sign a contract before the end of September. China’s decision will likely impact global potash prices.

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