Global Potash Sales Seen Rebounding in 201012 Jan 2010 • by Natalie Aster
Fertilizer producer Mosaic expects global purchasing of potash to increase to as much as 50 million metric tons in 2010 following dismal 32 million metric tons of demand for the crop nutrient in 2009. Rival Potash Corp., the world's largest producer of potash, earlier also projected this year's sales around 50 million metric tons.
Mosaic CEO Jim Prokopanko says in a second fiscal quarter conference call that global potash inventories rose steadily through most of 2009, despite major production cuts, as farmers, concerned about exorbitant pricing and hurt by the credit crunch, deferred fertilizer application.
Buyers of the nutrient were also staying out of the market in anticipation of big annual import contracts signed by India and China, which typically set the tone for spot market pricing. "The uncertainty among fertilizer buyers has lasted far longer than we anticipated, but cannot continue indefinitely," says Potash Corp. CEO Bill Doyle in a statement.
In July, India inked contracts to import potash at a delivered price of $460/metric tons. Chinese importers only weeks ago agreed to buy potash from the European export consortium Belarussian Potash for a delivered price of $350/metric ton. Canpotex, the export arm of North American producers Potash Corp., Mosaic and Agrium Inc. has yet to finalize a contract with Chinese importers. But Prokopanko says that Canpotex is unwilling to settle with Chinese importers at the $350 price. "We're not prepared to meet the kind of price expectations the Chinese have and we continue to discuss and negotiate a contract," Prokopanko said.
Mosaic, in a regulatory filing, notes that potash selling prices in the third quarter of its fiscal 2010 will be below second quarter fiscal 2010 levels.
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