ICL updates the selling price to one of its major customers

ICL is taking advantage of the sharp rise in the price of potash in the global market to update the selling price to one of its major customers, the Indian fertilizer importer IPL. ICL signed an agreement with IPL in April 2021, under which it undertook to supply the Indian company with 600,000 tonnes of potash by the end of 2021 at a price of $ 280 per tonne.
This agreement is part of a framework agreement for the sale of three million tonnes of potash in the years 2018-2023 signed in 2018. ICL has so far supplied about half of the quantity, and has reached an agreement with IPL according to which it will sell the company another 150,000 tons of potash by the end of 2021, at a price of $ 445 per ton - 60% above the price agreed in April 2021. The Indian company will give up the remaining quantity. The balance to customers in Southeast Asia who purchase potash from it at prices for immediate delivery (spot), probably $ 600 per ton.
The opening of the agreement was made possible thanks to a tender held by the Indian state-owned company RCF for the purchase of potash, in which a price of $ 445 per ton was set. The update of the agreement will increase ICL's revenues by $ 73 million, and will mark the price to be set for supply contracts to India and probably also to China which are expected to be signed in early 2022.
The Indian market was one of the main potash markets of ICL, due to its physical proximity to the port of Eilat and the relatively low transportation costs. In recent quarters ICL has tried to reduce supply to the Indian and Chinese markets, where it supplies under long-term contracts, but they have not benefited from the sharp rise in prices in the potash market. ICL sold 475,000 tonnes of potash in India in 2019, and its market share stood at 11.7%. In 2020, the amount of potash marketed by ICL to India increased to 620,000 tonnes, and its market share increased to 12.4%.