China Looks to Boost Potash Application

July 31, 2012 08:37 AM

Recent soil testing has shown that on Chinese farms, potash application has fallen behind nitrogen and phosphate. In response, China has looked to foriegn shores for potash mining opportunities. China imported nearly as much potash as they produced last year and as demand rises nationally for food, the Chinese government would like to have its bases covered.

Sinofert Holdings Ltd. looked first to Canada and later to Austrailia as possible locations for Chinese owned Potash mines. World demand for potash is expected to rise by at least 3% this year, prompting the search.

But offers by Sinofert, and subsequent offers by its parent company, Sinochem, were turned away in 2009 by Austrailia's Nufarm Ltd. (NUF) and again in 2010 by Potash Corp. Since then, the North American Potash Consortium, Canpotex, has contracted to sell China 700,000 MT through the summer of 2012 at 2011 prices. Meanwhile, Sinochem was able to negotiate a deal with the Belarusian Potash Company (BPC) to supply up to 500,000 MT putting China above the mark, and in good position to manage their potash defficiencies on the farm.

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