UPDATE 2-Mosaic profit drops on weak China supply contract
* EPS excluding items $1.02 vs. $0.93 - Thomson Reuters I/B/E/S
* Revenue fell 17 pct to $2.5 bln
* Sees Q3 potash volumes of 1.5 mln-1.8 mln tonnes
* Shares rise as Street touts earns beat
Jan 4 (Reuters) - Fertilizer producer Mosaic Co on Friday said its quarterly operating profit fell 30 percent and that it expects potash margins to fall further in its current quarter, a reflection of its recent low-priced contract with China.
China has been aggressively negotiating for lower potash prices, and in December Sinofert Holdings Ltd signed a deal with Canpotex Ltd - the offshore sales agency for Potash Corp, Mosaic and Agrium Inc - at a steep discount.
Mosaic Chief Executive Jim Prokopanko said he was disappointed Canpotex was not able to get higher prices in the China contract, and blamed low demand and smaller rivals.
"Others were willing to do something on pricing," he said in an interview. "However, we think volume is coming back."
Mosaic said it expects to sell between 1.5 million and 1.8 million tonnes of potash in its third quarter, with prices ranging from $370 to $400 per tonne, down from $443 per tonne in the second quarter. Continued...