India has gone directly to the source in its search for Potash. Two separate Indian fertilizer companies have entered talks with Canadian Potash producers.

Vancouver's Encanto Potash has been negotiating for a long-term guaranteed offtake at 8% below ruling market price with Indian consortium members represented by Rashtriya Chemicals and Fertilizers Limited (RCF). Representatives of the consortium visited Vancouver in December 2012 and the discussion included long-term prospects of 2.0 million tons of MOP annually.

Meanwhile, Gujarat State Fertilizers and Chemicals (GSFC) of India bought in to Saskatchewan's Karnalyte Resources. GSFC inked a deal that will account for a 20% stake in Karnalyte at $8.15 per share, totaling $45 million. The deal also includes a 20-year offtake agreement for product currently under development.

India has been walking a nutrient tightrope for the last few years with a government subsidy program that so heavily favors Urea that P&K are priced out of the market for most growers. India imports 100% of the Potash it uses at present, but with fresh supply deals from Canada, the imbalance could quickly be remedied.

Photo credit: Elroy Serrao / Foter.com / CC BY-SA

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