India stopped the import of potassium until the end of March and delayed the negotiations on the procurement of the next year until June, because the drought has lowered the demand in one of the world's largest consumers of fertilizer.

This decision is the first stop India imports of potassium for many years and will severely hurt the suppliers, already struggling from weak demand as China and Brazil also cut purchases.

Major suppliers are India, Uralkali, Potash Corp., Agrium Inc., Mosaic, K+S Arab PotashCo and Israel Chemicals.

Spot prices for potash , a nutrient for cereals, are at 8-year lows at 230$ per ton, which is four times higher than the previous year.

Demand weakened due to drought, reported the management of Indian Potash Ltd, the largest importer in the country. Despite the reduction in imports, India has 1 million tons of potash reserves.

Measures of India to stop import of potassium emphasize the change of the country's position in global markets of raw materials due to the deepening crisis in the agricultural sector.

Persistent drought slowed planting of various crops, including rice, wheat, sugar cane, corn, cotton, soybeans and canola, and reduced the need for fertilizer. And also in India will turn net buyer of raw material for the first time in the last few years.

The agricultural sector, which absorbs two-thirds of the 1.25 billion of India's population, is a threat to plans for economic growth Prime Minister Narendra modi.

Import suspension means that India will purchase potassium this year, less than planned.

In may last year, Indian manufacturers of fertilizers, including Rashtriya Chemicals and Fertilizers Ltd (RCF), and IFFCO Chambal Fertilisers and Chemicals, have contracted to import a total of 4.5 million tonnes of potassium with the possibility of increasing this volume to 5.2 million tons.

To date this financial year they purchased only 3 million tons and will buy more, said an industry official sources. The representative of the state of the company RCF has informed that the government has also taken the rare step of restricting the movement of imported fertilizers to reduce imports.

India usually begins negotiations on the import of potassium in February, signing a new contract before the start of the financial year in April. Negotiations will now begin in June.

The treaties signed by India and China tend to be the benchmark for other buyers in Asia, such as Malaysia and Indonesia.

Source: Thomson Reuters