China, India seeking potash discounts - ICL chief
By Rod Nickel (Reuters) - Chinese and Indian buyers of the crop fertilizer potash are seeking a cut of $10 to $20 per tonne in their next contracts with global suppliers, the chief executive of ICL Israel Chemicals Ltd said on Thursday. Potash prices have fallen in the past year due to excessive mining capacity, dry weather in India that limited crop production and a new Chinese tax. Contracts with Chinese and Indian buyers set a floor for sales to Brazil and the United States on a spot basis. Suppliers are likely to push back on requests for bargains. "We would always argue for more stable pricing or an increase, because if the industry is looking for new capacity, which it needs four or five years from now, then they need to give us incentive to invest," said Chief Executive Stefan Borgas, in a telephone interview from Tel Aviv. ICL is the world's sixth-largest potash producer. Chinese buyers including Sinofert Holdings Ltd and Indian importers most recently agreed to pay $315 and $332 per tonne respectively, Borgas said. Sinofert's contract expires on Dec. 31 and the Indian contract runs through March 2016. Along with ICL, suppliers to China and India include Canpotex Ltd, which represents Potash Corp of Saskatchewan, Mosaic Co and Agrium Inc, as well as Uralkaliy PAO and Belaruskali. The largest suppliers usually agree on terms before ICL. The company has battled the Israeli government over a plan to tax mining companies and boost state coffers. In protest, ICL has frozen or put under review nearly $2 billion in domestic projects. But discussions have turned "constructive," Borgas said. The "big threat" of taxes worth an extra $160 million annually has been replaced with regulations that would levy less than $100 million, Borgas said. ICL has had little discussion with shareholder Potash Corp, which owns 14 percent and is considering whether to sell its stake, Borgas said. Potash Corp has said it would like to own a majority stake, but that interest has previously run into political opposition. Borgas said a takeover is not impossible but Potash has not approached the company or Israel's government. If Potash made a proposal that addresses concerns about jobs, investments and management remaining in Israel, Borgas said he is sure the government would evaluate it "in a logical way." ICL's shares were flat in New York on Thursday afternoon and are down 24 percent for the year. (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Matthew Lewis)
