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Uralkali Sees India Signing Potash Deal Ahead of China in June

Yuliya Fedorinova / Bloomberg (UK)

Uralkali PJSC, the worlds largest potash producer by output, may soon reach a potash contract with India, signaling that the nation may sign the deal before China this year.

China and India have delayed signing contracts for shipment by sea because of large inventories. But now stocks are declining and India may sign the deal with the producers this month, Vladislav Lyan, chief executive officer at Uralkali Trading, said on a call with investors on Wednesday.

The price that China usually reaches at the start of each year with Russian, Belarusian and North American suppliers is a benchmark for suppliers and customers around the world. The biggest sellers are Uralkali, Belaruskali and Canpotex Ltd., which exports for Potash Corp. of Saskatchewan Inc., Agrium Inc. and Mosaic Co.

This year, China may delay deals until August or skip the contract for the first time since 2009, fertilizer producers and VTB Capital said in June after the International Fertilizer Industry Association conference in Moscow.

Uralkali, the only producer that can ship potash to China by rail due to common borders between the countries, slowed such deliveries starting from May to minimal levels, Lyan said. He still expects China to sign the deal this year.

Chinese potash inventories declined to 4 million metric tons as of the end of May from about 6 million tons at the start of the year. The deal with China may be signed at the end of summer or start of autumn, according to Uralkali.

The nation is likely bidding for potash below $200 a ton, RBC Capital Markets analyst Andrew Wong said on June 3. In 2015,it agreed to buy at $315 a ton.

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