Indian Potash signs five-year purchase deal with Israel Chemicals

Amid the ongoing Russia-Ukraine crisis, Indian Potash Ltd has signed a five-year deal to import 0.6-0.65 million tonnes of muriate of potash per year from Israel Chemical Ltd.

According to an official statement, the agreement runs from 2022 to 2027.

A Reuters report said India is looking to boost its fertiliser imports from nations such as Canada and Israel to ensure sufficient supplies ahead of the kharif planting season.

Among the various items that have seen a spike in their prices due to the Russia-Ukraine conflict is Muriate of Potash (MOP) fertiliser.

Russian ally Belarus is one of the leading suppliers of MOP to the Indian markets.

In the 2021-22 financial year, out of the 5.1 million tonnes of MOP imported into India, around 17.6 per cent came from Belarus. MOP is 100 per cent imported into India.

Trade sources said that after the conflict MOP prices which were imported into India under contract till November 2021 at around $280 per tonne has jumped to $500 per tonne (a rise of 78.57 per cent).

As a reaction to it, the price of NPKS (another fertilizer variant which uses potash) has also risen, while raw material cost of producing fertilizers is expected to spike sharply due to rising LNG prices.

“Either per bag retail price of fertilizers has to rise sharply or the government's subsidy burden has to go up because current rates are unsustainable for the industry,” a senior industry official had said.