The head of Agrium was quoted as saying their business is great because farmers are making a lot of money on the current record prices.
The price predictions for various fertilizer products is in the book - but these prices are now being debated. Russia - the largest producer of potash was quoted as saying producers now held the pricing power. Rice is just the latest crop to face a doubling of prices and export restrictions in Asia .
China Contract
Annual contract talks with China, the world's largest potash fertilizer consumer, will likely result in prices similar to those India recently agreed to pay, the chief executive of Agrium Inc said on Wednesday.
"We would expect them to be paying the equivalent of a landed price of $625" a tonne, Mike Wilson said in an interview on the sidelines of a fertilizer conference. Major potash producers in Russia and Canada secured a deal last week to sell potash at $625 a tonne (delivered) to India -- a contract normally settled after China negotiates its annual deal.
The contract was more than double last year's price.
Spot Prices
Calgary, Alberta-based Agrium is part of Canpotex, the offshore marketing arm for potash producers, including Potash Corp and Mosaic Co .
The deal prompted a hike in spot potash prices from Canpotex and other exporters to Brazil and Asian countries to $750 per tonne, effective June 1.
Wilson told the conference it isn't clear when negotiations will conclude, but said if China waits until the third quarter, it would risk depleting its stocks by the end of the year.
"What are they going to do going into the next round of negotiations? They're going to have zero inventory," Wilson said. "I can't see them getting into the October time frame." Wilson said in an interview that potash producers expect record sales even without demand from China because of tight world supplies.
"The market is such, from a supply point of view, that producers can sell out their plans without China, which is a very telling statement."
In the meantime our Agriculture watchlist prospers :
Here are a few returns from Thursday :
