India: Govt. Slashes Potash Subsidy by 10%

The Union Cabinet has slashed subsidies for potash-based fertiliser by more than 10 per cent for the next fiscal year beginning April 1, as the world’s leading importer of the crop nutrient tries to contain a fiscal deficit.

India has fixed the potash subsidy at Rs. 11.124 per kg for 2018-19, down from Rs. 12.395 this year. The reduction in government support could lead to a higher retail price for the farmers and potentially dent consumption and imports, Reuters said in a recent report. India relies on imports to fulfil its entire consumption of potash. Global producers including Uralkali, Potash Corp of Saskatchewan, Mosaic, K+S, Arab Potash and Israel Chemicals are key suppliers to India.

The country’s imports are estimated to have jumped more than 12 per cent to 4.6-mn tonnes in the 2017/18 fiscal year but could fall in the next year due to the lower subsidy.

Contracts signed by India and China are considered benchmarks globally and are closely watched by other potash buyers such as Malaysia and Indonesia.