Jan. 1 (Bloomberg) -- Potash Corp. of Saskatchewan Inc., Mosaic Co. and Agrium Inc. agreed to sell 1 million metric tons of the crop nutrient to China’s Sinofert Holdings Ltd. at a price that’s $70 a ton below a March agreement.
The new price covers shipments to Sinofert in the first half of 2013, Canpotex Ltd., a company that represents the three potash producers in offshore markets, said yesterday in a statement.
The reduction to about $400 a ton comes ahead of suppliers’ expected price talks with India this month. China and India, among the world’s largest potash importers, had put off new accords with the aim of getting cheaper supplies of the mineral used to strengthen plant roots and protect against droughts. The price paid by Sinofert is at the lower end of analysts’ expectations. Sinofert is China’s largest integrated agricultural company, according to the statement.
Analysts at Credit Agricole Securities USA, Dahlman Rose & Co. and Goldman Sachs Group Inc. last month said China and India may pay as little as $430 a ton, while Spencer Churchill, an analyst at Paradigm Capital Inc. in Toronto, said potash talks with India may settle as low as $400.
Potash producers responded to the months-long deadlock with production cuts to help balance global markets. Berezniki, Russia-based Uralkali OAO, the largest shipper by volume, plans to cut output by half between December and March, according to data compiled by Bloomberg.
Potash Corp., based in Saskatoon, Saskatchewan, in October and November announced the idling of four mines for eight weeks.
P.S. Gahlaut, managing director of Indian Potash Ltd., the country’s largest buyer, said in an interview last month that a delegation of Indian government and industry officials will travel to Russia in the first week of January for talks with Belarusian Potash Co., also known as BPC, which negotiates sales for Uralkali and Belarus potash producer Belaruskali.
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