By Yuliya Fedorinova
(Bloomberg) -- The world’s biggest potash producers could
agree a 14 percent price increase in looming annual supply talks
with Chinese buyers of the fertilizer ingredient, according to
VTB Capital.
Potash, which helps plants withstand dry conditions, is
mostly mined in Russia, North America and Belarus. China, the
largest consumer, usually signs pacts at the start of each
agriculture year to buy the nutrient from companies including
Belarusian Potash Co., Russia’s Uralkali PJSC and Canada’s
Canpotex Ltd., which sells potash for three miners, including
Mosaic Co. and the soon-to-be merged Potash Corp. of
Saskatchewan Inc. and Agrium Inc.
With spot prices on the Chinese domestic market recovering,
global potash miners may be able to strike a deal with buyers in
the country to sell the product for as much as $250 a metric
ton, Elena Sakhnova, Moscow-based analyst at VTB Capital, said
by phone. That’s an increase from $219 a ton last year. Adding
to the bullish outlook is a recent cut to supply, she said.
"Global producers, including Mosaic and Potash Corp.
removed about 9 million tons of nutrient from the market, while
European K+S is having output issues and the supply-demand
situation looks good,” according to Sakhnova. While last year
China delayed signing contracts to July, sapping demand, this
year’s talks may start within a week as miners move to
capitalize on the market rebound, she said.
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