- Russian company follows Belarusian Potash Co. on deals
- New contracts will run through January and July 2017
Uralkali PJSC, the world’s largest potash producer by volume, signed deals to supply the fertilizer to China and India, indicating a recovery in demand.
The Russian producer will supply 600,000 metric tons of potash to Sinochem Group, China National Agriculture Means of Production Group Corp., or CNAMPGC, and Cnooc Ltd. starting this month through January, the company said in a statement on its website on Monday. It is also signed an agreement with Indian Potash Ltd. to sell 650,000 tons through July 2017, it said in a separate statement.
The price in both contracts will be in line with the market, Uralkali said, without elaborating.
The price that China reaches with Belarusian, Russian and North American suppliers has traditionally been the benchmark for sellers and buyers around the world. Belarusian Potash Co. first agreed on the deal with China in July, setting the price at $219 per ton. This year India signed the deal ahead of China, agreeing to buy 700,000 tons from Belarusian Potash Co. at $227 per ton.
Potash prices fell to the lowest level in a decade this year after China and India postponed new contracts to June and July. BPC, as the Minsk, Belarus-based exporter is known, was also the first to sign the deal with India this year. Israel Chemicals also concluded contracts with Chinese clients in July.
Canpotex Ltd., the Canadian joint venture that represents potash-export sales from Potash Corp., Mosaic Co. and Agrium Inc., said in July that it will only sign contracts to supply China and India with the crop nutrient for the remainder of 2016 as it expects prices to rise next year.
“The news is quite expected,” Elena Sakhnova, an analyst at VTB Capital, said by phone from Moscow. “China and India cut stockpiles and started buying new volumes as seasonal demand picks up.”