Mosaic Co, North America's second-largest fertilizer maker, expects China will agree within weeks to buy potash from European producers for less than $400 a ton.
"We think it's imminent - if it's not before Christmas, it's going to be shortly after the new calendar year," Mosaic Chief Executive Officer Jim Prokopanko said on Dec 8 at an investor conference in New York organized by Bank of America Corp. "It may be as much hope as guessing that it's going to be done by the end of this calendar year."
Potash demand declined this year as farmers and distributors shunned the crop nutrient amid expectations prices will fall further after China concludes negotiations with Belarusian Potash Co (BPC), the marketing arm for state-owned Belaruskali and OAO Uralkali. China is one of the world's biggest importers of potash.
Negotiations between China and BPC typically set a benchmark for supplies from Mosaic, Agrium Inc and Potash Corp of Saskatchewan Inc, North America's largest potash producer.
"Anticipation is that we're going to see a price of sub $400, delivered to China," Prokopanko said. The price may be as low as $325 to $355 a ton, excluding transportation from Vancouver, he said.
Edlain Rodriguez, a New York-based analyst at Broadpoint Amtech, said in an interview that Prokopanko's price expectations are generally in line with analysts' estimates.
Standard grade potash at Vancouver's port is currently estimated at $420 a ton, down 27 percent from a record $575 in July, according to prices published by ICIS. Prices fell after India agreed in July to pay $460 a ton on a delivered basis for potash through the first quarter of next year.
