Indian Potash, Coromandel fertilizer imports may wilt as prices peak

Indian imports of potash, which is used as a fertilizer, will likely drop after a surge in prices, Bloomberg News reported. The news outlet had quoted Indian Potash Ltd. Managing Director P.S. Gahlaut as saying that the "consumption of potash is very price sensitive" in India. A global surge in agricultural production has pushed up demand for all forms of fertilizers, including potash, with India being the second-largest importer in 2019 after Brazil, accounting for $7.19 billion of imports or 11.0% of the world total, Panjiva's data shows.

The growth in India's imports of fertilizers has also outpaced shipments into Brazil and the U.S. Imports to India increased 31.9% year over year in the three months to Nov. 30, 2020, bringing the total over the past 12 months to a 3.0% improvement.

Shipments into Brazil increased 14.4% year over year, while imports to the U.S. declined 9.1% compared to a year earlier. The latter may indicate increased domestic sourcing given agricultural exports have continued to soar, as outlined in Panjiva's research of Feb. 22.

India's imports of potassic fertilizers have outpaced other forms recently, with growth of 71.4% year over year in the three months to Nov. 30, 2020. However, they only represented 16.9% of total imports in the past 12 months.

The leading form of imports were urea-based fertilizers, which accounted for 43.6% of the total and expanded by a still considerable 53.8% in the past three months. Use of diammonium phosphate, or DAP, dropped 7.2% in the past three months to represent 27.4% of the total, which may represent earlier attempts by the Indian government to cut imports by reopening domestic manufacturing facilities in January 2020.

Indian Potash was the largest contributor to the expansion in fertilizer imports in dollar value terms. Shipments linked to the company grew 38.1% year over year in the three months to Nov. 30, 2020. That was followed by a 29.8% rise in shipments linked to Indian Farmers Fertiliser Cooperative Ltd., while Coromandel International Ltd.'s growth was faster in relative terms with an expansion of 105% over the same period.

Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.