This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Potash Sector Still Waiting On Supply Contracts

Potash Sector Still Waiting on Supply Contracts

The contract reached between Sinofert Holdings (HKEX:0297) and Canpotex, the potash export arm of Potash Corporation of Saskatchewan (TSX:POT,NYSE:POT), Mosaic (NYSE:MOS) and Agrium (TSX:AGU,NYSE:AGU), will see 1 million tonnes of potash exchange hands in the first half of 2013.

The price of the contract, which The Globe and Mail reported is about $400/tonne, represents a decline of $70/tonne from the previous contract signed between Canpotex and China. The agreement is expected to set the tone for other deals signed through contracts and spot-price purchases.

Depressed 2012 fertilizer demand from India and China is a key component of the price decline.

Southeast Asia saw the biggest decline in potash demand in 2012, with a 1.9-million-tonne, or 20.2-percent, fall off compared to 2011, according to data collected by the Financial Times.

India saw the biggest proportional decline, with a reduction of 34.8 percent, or 1.6 million tonnes, in 2012. The drop came on the back of a devaluation of the country's currency and the return of government subsidies for fertilizers.

India is the next big customer in line to ink a deal with Canpotex, but when that contract will be settled is currently anyone's guess. The country is completely dependent on foreign supplies of potash, but does make use of alternative products, principally urea; it last signed a contract in August 2011, according to The Globe and Mail.

Suppliers such as Agrium and Uralkali have both suggested that contracts are likely to be settled in early 2013, but a source at Indian Potash, an unlisted company that negotiates on behalf of all Indian buyers, told The Globe and Mail, “so far, we have not started talking to global potash suppliers,” and noted that contracts are not likely to be settled until at least June.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
YHOO $27.05 -3.29%
AAPL $95.01 1.05%
FB $99.75 -4.15%
GOOG $682.74 -0.12%
TSLA $147.99 -8.99%


Chart of I:DJI
DOW 16,027.05 -177.92 -1.10%
S&P 500 1,853.44 -26.61 -1.42%
NASDAQ 4,283.7530 -79.3910 -1.82%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs