Potash Corp sees Chinese supply contract settling within weeks
By Rod Nickel
NEW YORK May 19 (Reuters) - Potash supply contracts with Chinese buyers should be settled in two to four weeks, the chief executive of Potash Corp of Saskatchewan said on Thursday, setting a badly needed global price floor for the slumping crop nutrient.
Potash prices have fallen to their lowest in a decade, weakened by declining U.S. farmer incomes, falling currencies in consuming markets such as Brazil and bloated mining capacity.
The Chinese contract usually sets a floor for a subsequent contract with Indian buyers and spot prices for Brazil and the United States.
Chief Executive Jochen Tilk was speaking at a BMO investor conference in New York. Afterward, he told Reuters he expected Chinese buyers to settle first with Belaruskali and Russia's Uralkali, as is typical.
A contract with Canpotex Ltd, a company owned by Potash Corp, Mosaic Co and Agrium Inc, would follow.
Contract negotiations have sometimes dragged well into each year, raising the question for some of whether selling to China on that basis is practical.
"We respect how China would like to negotiate, but (the contract format) is a bit dated and it's not the most productive approach," Tilk told the conference.
In April, the world's biggest fertilizer company by capacity cut its full-year profit forecast on weak demand and lower prices, raising concerns of another dividend cut. Continued...