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Reuters reported that Canpotex Ltd., a North American company owned by The Mosaic Company (NYSE:MOS), Potash Corporation of Saskatchewan (TSX:POT,NYSE:POT) and Agrium Inc. (TSX:AGU,NYSE:AGU), is requesting an 8 percent increase in its 2015 potash supply contract with China’s Sinofert Holdings.
Reuters reported that Canpotex Ltd., a North American company owned by The Mosaic Company (NYSE:MOS), Potash Corporation of Saskatchewan (TSX:POT,NYSE:POT) and Agrium Inc. (TSX:AGU,NYSE:AGU), is requesting an 8 percent increase in its 2015 potash supply contract with China’s Sinofert Holdings. This would increase the price by $25 per tonne, but Mosaic CEO Jim Prokopanko said that Sinofert wants to pay the same $305 per tonne rate as the 2014 contract. Contracts between Sinofert and major potash producers generally set a global price floor for the fertilizer, meaning this price increase is an important one for the industry.
Prokopanko stated:
China’s holding firm. As one shareholder, my advice to Canpotex is, ‘just hold firm.’
Sinofert’s argument for a price freeze is partly based on a 35 percent year over year reduction in freight rates from Vancouver, British Columbia to Asian markets, cutting the producers’ costs. From the producers’ standpoint, potash is already moving smoothly to other buyers, he said. Agrium said on Tuesday that its potash production is fully committed for the first half of the year.
Click here to read the full Reuters article.