The weakest monsoon in five years will result in reduced potash purchases by India reports "Bloomberg", adding that this will pressure potash prices in China, the world's largest potash market. Indian Minister of State for Chemicals and Fertilizers Srikant Jena said that potash purchases in the six months through September could be less than 2.1 million tons.
The report puts pressure on Israel Chemicals Ltd. (TASE: ICL), one of the seven companies that dominate the global potash market. Last month, the company signed a $345 million contract for the delivery of 750,000 tons of potash with India at $460 per ton, 26% less than the price in last year's contract.
"Bloomberg" quotes Beijing Orient Agribusiness Consultants Ltd. that China may aim for the lower end of $400-450 per ton for potash, and purchases have slumped from a record 9.4 million tons in 2007 to 5 million tons in 2008, and 1.7 million tons in the first half of 2009.
HSBC today said that Israel Chemicals will sell potash at an average price of $515 per ton in the second half of 2009. It predicts that the company will sell 2.42 million tons of potash this year, 11.6% less than in 2008.
Israel Chemicals share rose 1.5% at the opening today, but slipped back to a gain of 0.8% by early afternoon to NIS 44.96.
Published by Globes [online], Israel business news - www.globes-online.com - on August 11, 2009
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