09 June 2009 17:20 [Source: ICIS news]
HOUSTON (ICIS news)--Potash Corporation of Saskatchewan (PotashCorp) might not sign a new long-term contract with China for potash, preferring instead to sell potash to the Chinese at spot prices in order to reduce market speculation, the company's chief executive said on Tuesday.
The three-year contract expires in December. A new contract would usually be signed in the fourth quarter.
“For moral reasons more than anything else, we may go to spot selling with the Chinese to take some of the speculation out of the market,” Doyle said at the RBC Capital Markets’ Global Mining and Materials Conference in
As the world’s largest fertilizer company, PotashCorp’s dealings with
Doyle also said that the unprecedented decline in fertilizer use in the
“Farmers pulled in the purse strings despite farm economics that support fertilizer investment,” Doyle said.
“Paralysis in the fertilizer markets is coming to an end because farmers can only go so long mining the soil bank without replacing nutrients,” Doyle said.
Doyle said the fertilizer market will start to move in July as
“We had the ability to put the brakes on potash production when we needed to,” Doyle said. “We also have the ability to put the pedal to the metal when demand calls.”
In other comments to investors, Doyle said the recent Argentinean and Brazilian soybean harvests were down 17%, most due to the lack of fertility.
“The 2009 crop year is off to a poor start in the
Corn planted in the eastern US Corn Belt in wet soils would have shallow root systems, he said.
Doyle added that the decline in the application of fertilizer during the corn and soybean planting season in the
“The US Department of Agriculture (USDA) predicted a corn yield of 155 bushels/acre this year,” Doyle said. “We think the yield will be closer to 150 bushels/acre.
“We think USDA will let a little air out of the yield bag when it reports new yield estimates on 10 June,” Doyle said.
“Agriculture will be one of the first industries to lead the world out of the recession,” Doyle said in closing. “The need for food is too great for this not to happen.”
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