Fertilisers and Chemicals Travancore is negotiating a three-year contract to purchase 250,000 metric tonnes annually of rock phosphate from Togo’s SNPT, marking the first long-term fertiliser deal with the African nation. The agreement would provide stability against price volatility for India’s agricultural sector, which constitutes 15% of the economy. Recent data indicates a 30% increase in rock phosphate imports from Togo in the last fiscal year.
Fertilisers and Chemicals Travancore (FACT) is engaged in negotiations to establish a three-year agreement for the procurement of rock phosphate from Togo. This initiative aims to diversify its supply sources, according to three knowledgeable insiders. Should this agreement be finalized, it would represent the first long-term fertiliser contract between an Indian corporate entity and Togo.
FACT intends to acquire 250,000 metric tonnes of rock phosphate annually from the Societe Nouvelle des Phosphates du Togo (SNPT) over the contract period. Although both FACT and SNPT have not provided a comment regarding these developments as requested by Reuters, the initiative reflects Indian companies’ increasing interest in securing stable fertiliser supply agreements.
India’s agriculture sector constitutes 15 percent of the country’s $2.7 trillion economy, thus making long-term fertiliser contracts essential for mitigating price fluctuations and potential supply shortages. Last month, FACT reportedly signed a non-binding agreement with SNPT for the purchase of rock phosphate. Notably, except for pricing details, all terms have been established, allowing for quarterly price renegotiations.
Over recent years, India has experienced a steady increase in rock phosphate imports from Togo, primarily conducted on a spot market basis. In the fiscal year ending March 31, 2024, Indian imports from Togo are projected to reach a total of 1.1 million tonnes, which marks a significant 30 percent rise compared to the prior year, according to statistics provided by the Fertiliser Association of India.
In conclusion, Fertilisers and Chemicals Travancore is poised to initiate a long-term relationship with Togo for rock phosphate procurement, aimed at ensuring supply stability for the Indian fertiliser market. The proposed agreement signifies an effort to mitigate price volatility in the agricultural sector, which is crucial for India’s economy. As imports from Togo rise, this partnership may enhance India’s fertiliser supply chain while addressing the burgeoning requirements of its agricultural industry.
Original Source: www.business-standard.com
