March 30, 2015 / 3:23 PM / 3 years ago

UPDATE 1-Canpotex sets potash contracts with Chinese buyers

(Adds Potash Corp comment, report on price)

By Rod Nickel

WINNIPEG, Manitoba, March 30 (Reuters) - Canpotex Ltd, the offshore potash sales arm of North America’s Potash Corp of Saskatchewan , Mosaic Co and Agrium Inc , said on Monday it had set 2015 supply contracts with major Chinese buyers, including Sinofert Holdings Ltd, and expected higher volume.

Canpotex did not release price terms for the fertilizer contracts, but said shipments to China will reach at least 1.8 million tonnes, up from 1.6 million in 2014, and may be as much as 2.5 million tonnes, depending on supply, demand and logistics.

The settlement comes months later than usual, and the delay had fueled speculation that the contract system would not continue. Chinese and Indian buyers purchase the crop nutrient through annual contracts, while U.S., Brazilian and other buyers make purchases on the spot market.

Earlier this month, Belaruskali was the first major potash trader to announce an agreement with China. The first contract with China usually sets a benchmark for others.

Belarus said it increased the price of potash exports to China by $10 to $315 per tonne, which was lower than expected, according to Russian rival Uralkali.

BMO Capital Markets, citing a report by Argus Media, said Canpotex settled with Sinofert at the same $315 price, as had been expected.

Potash Corp spokesman Randy Burton declined to confirm the price but said it was competitive with earlier deals.

Mosaic Chief Executive Jim Prokopanko said in February that Sinofert wanted to pay the same rate as last year, while Canpotex was seeking a $25 per tonne increase to $330.

Shares of Potash Corp and Agrium gained about 2 percent in Toronto, while Mosaic also rose in morning trading in New York.

Spokespersons for Canpotex, Mosaic, Agrium, Sinofert and Uralkali could not be reached for comment immediately. (Editing by Peter Galloway)

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