Belaruskali To Lose $1 Billion In Its New Contract With India

Prices for fertilizers have come down by more than $100.

On Monday June 27 Belaruskali informed that a contract for delivery of potash fertilizers to India was signed. The contract was signed with a long-term strategic partner of the Belarusian Potash company in India, IPL company. The price per 1 ton has dropped by more than $100 (from 332 to 227), but it is not the only disadvantage.

In particular, in the message of the Belarusian Potash Company (BPC) it is written that “a contract for deliveries of potash fertilizers to the Indian market or the financial year 2017 at $227 per tonne CFR with a deferred payment for 180 days has been signed.” According to the contract, Belaruskali is to supply 700,000 tonnes of fertilizers. The shipment of products at a new price starts from July 1, 2016, telegraf.by writes.

As noted by an economic commentator Dzmitry Ivanovich, in all likelihood, the decrease in price by $100 is to concern all contracts, which means losses of about $1 billion in hard currency returns at an annual rate.

Secondly, due to the 180 days’ credit, Belarus is to receive the first money for 2016 only in 2017.

Besides, Belaruskali would have to pay the export tax in 2016, though the money for deliveries to India would not be received in 2016 yet.

“In general, it seems to look fine, the contract has been signed, but as it turns out, there is little positive in that,” – the expert concluded.