India has won cuts to import prices for phosphate fertilizers, and is seeking discounts to prices for potash too, in what appeared a sign of customers regaining some power over the nutrient market.

Industry officials in India, the world's biggest importer of phosphate nutrients, claimed that unnamed exporters had agreed to price cuts of about $35 a tonne for diammonium phosphate, with prices of NPK – the compound nitrogen, phosphate and potash nutrient – reduced by $25 a tonne.

The Indian Farmers Fertilizer Co-operative, Iffco, is also reported to be in talks to cut potash prices, seeking reductions of at least $40 a tonne.

The talks come less than four months after Indian buyers agreed a hard-fought potash supply deal with North American producers averaging out at about $500 a tonne, sealing a phosphate deal, at $677 a tonne, a month later.

Tumbling rupee

However, Indian buyers claim the prices have become unworkable thanks to the slump in the rupee, which has tumbled some 14% against the dollar since August to hit an all-time low this week.

The rupee's drop reflects persistent inflation in India - despite 13 lifts to lending rates in the past two years - besides the appeal of the dollar as a safe haven in troubled macroeconomic times.

"We can't afford to pass on price rise to farmers. So we have asked our suppliers to cut prices," US Awasthi, the Iffco managing director, said.

'Not so secure'

But the agreement by fertilizer groups, which played hardball in talks with India earlier this year, to price cuts so readily was also seen as a sign of producers' weakening grip.

"They have learned a lot from 2008, and we are not going to see a collapse in fertilizer prices," a London-based mining investor told Agrimoney.com.

"But you have to think that, with what has gone on in the world in the last couple of months, they are not so secure in their position as they were over the summer."

German-based potash group K+S and Canadian giant PotashCorp have in the last month cut forecasts for shipments, while phosphate leader Mosaic in September revealed profits below Wall Street expectations.

Benchmark Tampa Bay phosphate prices have already eased back from summer highs, data from PotashCorp earlier this week showed, while potash group ICL warned that buyers had become "wary of commitment".

Quantity quid pro quo

Russian-based PhosAgro - which in March 2010 signed a three-year, 3m-tonne supply deal with India, valued at the time at about $1.5bn - revealed it was one of the companies which had agreed price cuts, "in consideration of the substantial rupee devaluation".

The group said it had agreed to an unspecified "discount on current contract phosphate fertilizer prices", gaining in a return a commitment from Indian buyers to buy additional volumes at PhosAgro's request.

PhosAgro will have no spare phosphate fertilizers to sell until April if it exercises this right, the group said.

PhosAgro depositary receipts, a proxy for shares, closed down 1.7% at $10.42 in London.