North America Potash Producers Sign Deal With China Buyers

March 31, 2015 07:14 AM
 
North America Potash Producers Sign Deal With China Buyers

Potash Corp. of Saskatchewan Inc. and North America’s two other largest producers of the crop nutrient signed 2015 supply contracts with their major customers in China at “current competitive levels.”

 

Canpotex, the marketing venture that represents Potash Corp., Mosaic Co. and Agrium Inc., expects to ship at least 1.8 million tons to China this year, an increase of more than 12 percent from 2014, according to a statement on Potash Corp.’s website Monday. It didn’t provide more details on pricing.

“The 1.5 million tons I was expecting would have been a good number,” Spencer Churchill, a Toronto-based analyst at Paradigm Capital Inc. It “shows that lower prices are stimulating some demand.”

The contract negotiations between potash producers and buyers in China, the biggest consumer, typically set a benchmark price for the fertilizer used by farmers to grow healthy crops. The talks, which are usually wrapped by the end of February, took place this year against the backdrop of high inventories in China.

Belarusian Potash Co. said earlier this month it signed a contract with China to sell potash for $315 a metric ton, including shipping costs. That was $10 more than last year’s price.

Canpotex’s reference to “current competitive levels” probably means it also agreed to sell potash for $315 a ton, Churchill said.

Prices Sought

 

PAO Uralkali, the world’s biggest supplier, and Canpotex were seeking price increases of $30 and $25 per ton, respectively, Oleg Petrov, Uralkali’s head of sales and marketing, said by e-mail March 19.

 

A spokesman for Canpotex said the marketing organization declined to comment further on the price.

“We are encouraged by the strength we are seeing in Chinese potash demand,” Canpotex Chief Executive Officer Steve Dechka said in the statement. “These settlements help position our key customers in this region for continued growth and highlight Canpotex’s increasingly important role in supporting China’s rising potash needs.

 

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