Chinese potash importers agree to huge price rise
Saskatchewan potash producers have won a US$400-a-tonne price increase for this year's sales to massive Chinese buyer Sinofert Holdings, a move that lifted the shares of Canadian and US fertilizer producers on Wednesday. The contract negotiated by Canpotex, the offshore marketing agency for the Saskatchewan potash industry, was announced Wednesday morning by Potash Corp. of Saskatchewan. In addition to PotashCorp, Canpotex represents Agrium and Mosaic. PotashCorp, the world's biggest fertilizer producer, stated that “as a result of the timing of this settlement and unprecedented demand in other markets,” it has only one million tonnes it can commit to Sinofert through the rest of this year. “Significantly higher potash prices and extraordinarily tight supply have become much more firmly entrenched since China's previous contract was signed 14 months ago,” stated PotashCorp ceo Bill Doyle. “With the intense pressure on global food production and continued growth in potash demand, this is the reality for our industry for the foreseeable future.” Doyle noted that the settlement with Sinofert - which is one-fifth owned by PotashCorp and is the largest fertilizer distributor in China - “highlights the importance of securing supply in an increasingly tight market.” PotashCorp supplies 54% of Canpotex's requirements.
(Canadian Press, Reuters 080416)
PCS's stock price has gone up something like 200% in the past year...it is on track to become Canada's largest corporation by market share sometime this year. Bigger than RBC, bigger than Imperial Oil or Petro-Canada. Incredible.