India, China target cheaper potash as cartel crack
"So far no confirmation (from sellers), but we are hopeful," said Gahlaut, who has been leading negotiations with potash suppliers on behalf of Indian buyers.
The Indian rupee has fallen more than 10 percent against the U.S. dollar since companies signed potash imports deals in February and is trading around record lows.
An official with a leading Indian co-operative fertiliser company said he expected most sellers would offer a discount to India in order to win new contracts.
"There is competition among sellers. India is asking to dispatch at $380 per tonne, but the way inventory is building up at the seller's end, I don't think they will have any problem in accepting this price," the official said.
Uralkali and Potash Corp of Saskatchewan declined to comment on possible negotiations with India, but an industry source at a producer outside Canpotex and the former BPC cartel discounted talk of price cuts.
"I can't see India getting any reduction in prices on existing contracts," the source said.
There had been a lot of "noise" from India on re-negotiating prices and, in one case, a buyer contacted the firm to seek lower prices but did not send in an official request, he said.
A Russian industry source said the pricing of a signed potash contract had never been changed in the past. But the source pointed to a possible precedent in the phosphate market, when Phosagro agreed in 2011 to a discount on its contract with India in return for a pledge to purchase higher volumes.
India has said its potash consumption, which has been squeezed by higher prices, could return to levels around 6 million tonnes a year last seen in 2008/09 if suppliers made big price cuts.
However, Chinese officials said its push for lower prices would not be linked to increased purchases.
China's domestic potash output would exceed 6 million tonnes in 2013, up from about 5.4 million tonnes in 2011, while domestic stocks would rise above 5 million tonnes.
"Even with the price fall, I don't expect China to increase imports because of large inventories, while domestic production has been expanding. Imports should decrease gradually on a year basis," said the industry association's Wei.