Potash Discount of 10% Said to Be Negotiated in Brazil

Potash is being negotiated in Brazil at a discount of as much as a 10 percent on July prices by Soc. Quimica & Minera de Chile SA, Latin America’s biggest fertilizer producer, said two people with direct knowledge of the process.

SQM is negotiating with Brazilian buyers to sell the crop nutrient at $360 to $385 a metric ton, said one of the people. Plant Bem Fertilizantes SA, based in the southern farming state of Parana, may pay SQM $375 to $380 a ton for a 15,000-ton shipment, from $400 to $415 last month, said the other person. Both asked not to be identified because the talks are private.

The prospective transactions indicate prices have “drifted little” since Russia’s OAO Uralkali announced July 30 an end of production restrictions and predicted the crop nutrient would sink below $300 a ton, Brazil’s Grupo BTG Pactual said today in a note to clients. Uralkali may have charged $370 to $380 a ton to Brazilian customers, undercutting rivals charging $390 to $400 a ton, Argus FMB said Aug. 23.

An external public relations representative for Santiago-based SQM didn’t respond to an e-mailed request for comment and didn’t answer phone calls. Plant Bem executives declined to comment on the company’s fertilizer purchases, an assistant said by phone from Maringa, Brazil.

CEO Detained

Uralkali, the world’s largest potash producer, quit the joint venture with Belarus last month over a dispute about foreign sales. Belarus officials detained Uralkali Chief Executive Officer Vladislav Baumgertner after inviting him to Minsk for talks.

South America will be the first major farming region to enter its planting season since the Eastern European venture’s collapse. Brazilian soybean growers, which use potash to boost crop yields, next month will start planting a record 88.4 million-ton crop, researcher Agroconsult said in its first forecast for the coming harvest.

Plant Bem imports potash via its port facility in Paranagua and sells products to fruit, grain and oilseed farmers in central and southern Brazil.

SQM shares fell 0.3 percent to 13,288 pesos at 9:38 a.m. in Santiago, extending a year-to-date decline to 52 percent.

To contact the reporters on this story: Matt Craze in Santiago at mcraze@bloomberg.net; Mario Sergio Lima in Brasilia Newsroom at mlima11@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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