Canadian fertilizer firm Canpotex has signed a three-year initial potash supply deal with Chinese equivalent Sinofert, although the price for this year's first half has yet to be agreed.
The commitment is for standard MOP and a substantial option for other grades. China's imports of granular MOP have been growing rapidly in recent years and were a factor in the tight supplies of granular MOP last year.
Canpotex will supply a minimum of 1.9mn t of red standard grade potash during the three-year period. Sinofert also has the option to buy up to 2.4mn t, or 800,000 t/yr, of other grades of Canpotex potash. Pricing will be negotiated every six months, for January-June and July-December, based on market conditions.
The initial deal covers 1 January 2015 to 31 December 2017 and is "designed to encourage future growth in new Canpotex product grades and new market regions in China, as it provides exclusivity to Sinofert for Canpotex red standard grade potash only, provided Sinofert exercises the annual minimum purchase requirements", Canpotex said.
The deal signifies Canpotex's continuing commitment to the growing China market, said the company's president and chief executive, Steve Dechka. "Canpotex is committed to making an important contribution to global food security and meeting China's growing potash needs."
bdn/rjd
Send comments to feedback@argusmedia.com
Request more information about Argus' energy and commodity news, data and analysis services.
Copyright © 2015 Argus Media Ltd - www.argusmedia.com - All rights reserved.
