02 January 2013 12:14 [Source: ICIS news]
LONDON (ICIS)--The stalemate between potash producers and Chinese importers has ended after Canada’s Canpotex late on Monday announced that it has struck a deal with Sinofert Holdings to supply 1m tonnes of potash in the first half of 2013 at $400/tonne (€304/tonne) cost & freight (CFR).
The price is at a $70/tonne reduction from the last contract price of $470/tonne CFR, which was signed in March 2012. Chinese importers did not sign contracts in the second half of 2012 as they were aiming to secure lower prices.
PotashCorp's share of the sale is around 50%, Mosaic's is 40% and Agrium's is about 9%, a media report said.
The move is significant as it has ended the six-month long deadlock between suppliers and Chinese buyers. Belarusian Potash Company, which is another major seller to China, is now expected to finalise a similar deal soon.
The settlement has also raised expectations that Indian importers, who did not agree to new contracts in 2012, may sign an agreement soon. India typically buys potash at a $30-40/tonne premium to the price that Chinese importers pay.
China and India account for around 25% of the world’s potash market.
($1 = €0.76)
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