Canpotex - Canadian Potash Exporters, including major North American agmin players Nutrien and Mosaic - says the price was "significantly below" current levels it was receiving for potash in key offshore markets and reflected a "complete disconnect from the strong fundamentals currently being observed" for major agricultural commodities in several growing regions around the globe.

Belaruskali had settled the 2020 India contract at $230/t.

Canpotex recently announced it was fully committed on potash volumes through to the end of March, and now through April, despite it being yet to finalise a supply contract with its India-based customers. 

Canpotex recorded record potash shipments in 2020 and it forecasts further export market growth in 2021.

"Canpotex is committed to the competitive supply of all of our valued customers and we will independently do so at levels appropriate to the market fundamentals that we see," it said in a statement to Mining Journal.

Scotiabank's agmin guru Ben Isaacson said the settlement was "quite disappointing".

He said the bank understood suppliers had been seeking a price increase of $40-$50/t. The analyst estimates the contract size to account for about 15% of India's demand over the next year.

"In our view, this may place a cap on what the Chinese will pay. Why should the Chinese pay more when they consume more than three times the potash and import nearly twice what India pays. Even the potash bears were looking for a $20 increase, so we expect the market to be disappointed," he said.

He pointed out a potential silver lining was that the development would likely motivate China to settle its contract sooner rather than later.

Isaacson also speculated that Belaruskali had offered a discount to India due to pressure placed on it by other customers like Yara International on the back of civil unrest and alleged election fraud in Belarus over the past six months.