India may pay more for potash imports on low inventories

With inventories of potash held by North American miners, the world's biggest, standing below average levels, Indian importers may have a tough time negotiating prices.

After China, India is the largest importer of the nutrient in the world.

India imports all its potash.

According to data from Canada-based PotashCorp, North American producers held about 1.9 million tonnes of the nutrient last month, down 85,000 tonnes on December levels.

PotashCorp forecast earlier this month that India would move "quickly to secure new supply contracts and ensure product is available to meet its growing needs." It estimated that the country's demand would peak at a record 6.5 million tonnes this year.

However, India's biggest buyer, Indian Potash, has pitched consumption at 5.8-6 million tonnes, and projected price levels at $390 a tonne saying that domestic importers were unwilling to pay more.

This price, market experts say would be lower than the $400 a tonne at which China, the top importer, has settled on. Experts say that India usually settles about $20 a tonne higher than China's settlement price.