UPDATE 2-Uralkali slashes potash price by 24 pct for China

Mon Jan 20, 2014 12:37pm EST
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* Uralkali to sell potash at $305/t to China, vs $400/t in H1 2013

* The new benchmark could revive demand for potash - industry sources

* India's contracts may see a premium of $15-$20/t - source

By Polina Devitt and Ron Bousso

MOSCOW/LONDON, Jan 20 (Reuters) - Russia's Uralkali , the world's top potash producer, slashed prices by 24 percent in a new semi-annual supply deal with China, hoping to set a new floor to global prices that collapsed after it quit a powerful sales alliance with Belarus.

Global potash prices were thrown into a tailspin after Uralkali broke away from its BPC joint venture with Belaruskali in July, sparking competition between producers that had previously maintained a high discipline on pricing.

Although the new benchmark represents a sharp fall from last year's contract price of $400 a tonne, market sources said it was not far removed from the levels prevailing in the spot market since July.

China, the world's largest potash consumer whose contracts are seen as a benchmark by the bulk of market participants, has agreed to buy 700,000 tonnes of potash from Uralkali in the first half of 2014, the Russian company said on Monday.   Continued...