Belarus raises price in its new potash supply contract with India
- The contract signed earlier than market expected it to come.
- May support shares of Belaruskali's peers.
- The contract's price is up $17/t from a year ago.
MOSCOW: Belaruskali, the world's largest producer of potash, has signed its new annual contract to supply 800,000 tonnes of potash to India's largest importer of the crop nutrient, Indian Potash Limited, at a higher price than a year ago, it said on Friday.
The Belarusian potash monopoly has kept its output stable despite months of political crisis in Belarus with some of its workers taking part in mass protests, demanding a leadership change in the country.
The product will be supplied at $247 a tonne on a cost and freight basis, the Belarus Potash Company (BPC), Belaruskali's trade arm, said in a statement. Its last year's contract with India was priced at $230 per tonne.
"Taking into account the importance of such a contract for both the Indian market and the global potash market, BPC and IPL were able to reach the agreement that will contribute to the stability of the global potash market with the potential to strengthen prices further," BPC said.
This year's contract was signed far earlier than the market expected it to come, analysts at VTB Capital said in a note.
"This early signing supports our strong outlook on 2021 potash demand globally and particularly in India," VTB Capital said, adding that India could increase imports by 1 million tonnes this year.
Belaruskali's contract may also support shares of its peers in this market, including Mosaic and Israel's ICL , it added.
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