NEW YORK, May 14 (Reuters) - Spot market prices for the crop nutrient potash are rebounding after some of the world's biggest fertilizer consuming countries signed contracts at deep discounts, according to Potash Corporation of Saskatchewan .
"Basically, what we've done is re-set the market price and seen the spot markets increase since the contracts were signed," Chief Executive Bill Doyle said by video broadcast to the BMO Farm to Market conference in New York.
With increases of $50 to $70 per tonne, spot markets look set for further, modest price growth, Doyle said.
Doyle said the company was seeing prices of $470 per tonne for potash in Southeast Asia for the third quarter, and prices approaching $450 a tonne on a delivered basis in Brazil.
A lack of buying by China and India in the second half of 2012 weighed down prices for potash, which boosts yields of crops like corn and rice. Chinese buyers signed a new six-month supply contract on Dec. 31 with Canpotex Ltd - the offshore sales agency for Potash Corp, Mosaic Co and Agrium Inc - and Indian buyers signed a deal for the rest of 2013 in early February.
China and India typically negotiate contracts at a discount to spot prices that buyers in other countries pay.
Potash Corp expects global potash shipments to rebound in 2013 to 55 to 57 million tonnes, up from 51 million tonnes last year, and multiple years of further growth.
But Doyle said prices are far from the levels necessary to justify building new mines.
Doyle said it would be a "colossal mistake" for BHP Billiton Ltd to give the final go-ahead to its 8-million tonne potash mine in Western Canada, because the economics don't make sense.
A BHP spokesman declined to respond to Doyle's comments.
German rival K+S AG warned last month that its Canadian potash project would cost more and take about six months longer than planned to open, while U.S.-based Mosaic this week shelved plans to expand Canadian potash production further.
Potash Corp has spent the past decade expanding its mines in the Canadian provinces of Saskatchewan and New Brunswick.