Canpotex, Uralkali fully committed until October

Canadian potash distributor Canpotex and Russia's Uralkali Trading are both fully committed on potash deliveries until October.

Uralkali said it is even tighter for granular MOP, and is fully committed until 2019.

Both companies cited strong demand as a key factor in the tight supply levels, while Canpotex said solid agricultural fundamentals in its offshore markets had also contributed.

Other international potash sellers report tight supplies on the back of strong demand this year, and robust crop prices. SQM has previously said it is fully committed until 2019 across all MOP products.

Suppliers have kept a tight order book over the past 12 months, with many reporting being fully committed — generally meaning that sales volumes and expected orders have been allocated, and that no MOP is available to buy without order cancellations or a reallocation of resources from elsewhere — for months at a time.

Some market participants view the supply tightness as artificial, the result of producers dropping output to a fraction of mine capacity. But some producers appear to be aiming for record production levels this year.

Canada's producers continue to adopt a strategy of matching supply with perceived demand, and most mines in the country are operating at nowhere near capacity. Some have even been idled — the Allan mine in May, and Vanscoy in April — while others are producing at as little as 50pc of capacity.

But Israel's ICL aims to increase its production to 5mn t/yr from this year, for five years. And Belaruskali's output was up by 1.4pc in the first four months of this year, compared with last year. Jordan's APC produced 2.32mn t of potash in 2017 — the company's second-highest annual total — and the firm's first-quarter 2018 output figures showed that the trend is on course to continue this year.

Although Uralkali did not release production figures for 2017, Argus estimates the firm's output at a record 11.5mn-12mn t. And K+S will almost certainly produce more MOP than the 3.2mn t of output in 2017 as it ramps up production at the 2.86mn t/yr Bethune mine in Canada. Russia's Eurochem, a new entrant to potash production, is also ramping up output. It could be producing 1mn t of MOP in 2019 from its two new mines, which may contribute to the end of any supply tightness — artificial or otherwise — as K+S Canada also seeks to seize market share.