RPT-UPDATE 3-Uralkali agrees potash supply deal with Malaysia's FELDA

Mon Dec 9, 2013 10:05am EST
 
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* Uralkali in JV with Malaysian FELDA to boost potash sales

* JV to sell at least 1 mln T in southeast Asia a year

* No clarity on future of FELDA imports from Canpotex

By Polina Devitt and Anuradha Raghu

MOSCOW/KUALA LUMPUR, Dec 9 (Reuters) - Russia's Uralkali , the world's top potash producer, has agreed a supply deal with Malaysia's state-owned plantation owner, the latest move in a global battle over pricing and market share between makers of the crop ingredient.

Uralkali said on Monday it had formed a joint venture with the Federal Land Development Authority of Malaysia (FELDA) which would secure potash deliveries to plantations including those owned by FELDA in Malaysia and other countries.

The deal could boost Uralkali's sales in Malaysia and Indonesia, a major market for potash due to demand from the palm oil industry. Uralkali's sales in the region were only 200,000 tonnes in the first half of 2013 compared with 1.2 million tonnes in 2012 as a whole.

Uralkali's move comes amid rising competition among potash producers, fuelled earlier this year by Uralkali itself when it quit a cartel of producers based in Russia and Belarus which had controlled 40 percent of the $20 billion global potash market.   Continued...