MUMBAI, April 1 India agreed to buy potash from Russia's Uralkali at $322 per tonne for the year starting April 1, the lowest price in seven years and about a quarter less than last year's levels, two industry sources told Reuters on Tuesday.
The bargaining power of buyers has increased since Uralkali broke away in July from the Belarusian Potash Company, with global potash prices falling more than 20 percent.
For the fiscal year through March 31 India bought potash at $427 per tonne from Uralkali, the world's largest potash producer, although it was able to force the supplier to cut prices to $375 a tonne due to a slump in the Indian rupee and the drop in global spot potash prices.
"We have agreed on the price (for next fiscal year). Now we are negotiating volume," one of the Indian buyers told Reuters.
A team of Uralkali's sales officials is in India to finalise deals for over 1 million tonnes, a senior fertiliser industry official has said.
Uralkali declined to comment on any deal to sell potash to India.
Uralkali's contract price is likely to emerge as the benchmark for other suppliers to India, such as the powerful North American trading group Canpotex Ltd, owned by Potash Corp of Saskatchewan , Mosaic Co and Agrium Inc.
Other potash producers who supply India include Germany's K+S AG, Jordan's Arab Potash Co and Israel Chemicals. (Reporting by Rajendra Jadhav; Additional reporting by Polina Devitt; Editing by Tom Hogue)