TORONTO (miningweekly.com) - Canpotex, the offshore marketing company for Canadian potash producers Potash Corp, Agrium and Mosaic, has inked a new supply contract with Indian buyers for the second quarter, it announced on Friday.
About 600 000 t will be shipped at a contract price of $370/t, including freight costs, to a consortium of buyers that includes Coromandel International Limited and Tata Chemicals.
Earlier this month, Canpotex said it had agreed to sell 350 000 t of potash to China's Sinofert before the end of March.
The sales agreement was at “competitive prices” Canpotex said at the time, without disclosing any further terms.
While buyers in some parts of the world, like Brazil, purchase potash on a spot basis, Chinese and Indian buyers have traditionally negotiated annual price contracts with producers.
In December, Russia's Belorussian Potash Company announced a pricing agreement of $350/t with Chinese buyers, and smaller rival Israel Chemicals followed with its own deal at the same price.
But Bill Doyle, the CEO of the biggest producer, Potash Corp, said in January he believed the Russian producers had settled too low.
Prices and demand for potash, which is one of three essential crop nutrients, soared in 2007 and the first three quarters of 2008, with some shipments selling for as high as $1 000/t on the spot market.
However, farmers around the world responded to the financial crisis by deferring the use of fertiliser and Potash Corp and the other handful of global producers were hit hard, with Potash Corp reporting an almost 70% year-on-year decline in fourth-quarter earnings.
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