MOSCOW, May 24 (Reuters) - Russia’s Uralkali, one of the world’s largest potash producers, does not plan to sign a contract with China to supply potash in the second half of 2013 due to unfavourable market conditions, a company spokesman said on Friday.
Potash producers around the world keenly look out for signs of flagging demand in China, one of the world’s largest importers of the pink or white crop nutrient.
“Due to large stockpiles, low prices and relatively low demand in China, the contract for 2014 will not be signed before November-December (2013),” the spokesman said.
Chinese potash demand in the second half is likely to be much weaker than expected, according to Deutsche Bank analyst Bob Kommers, who said no Uralkali-China contract was a bad indicator for potash producers globally.
“Spring application has been weaker than expected, therefore inventory levels are high and spot prices are low in China, so the expectation is that demand will not recover in the second half,” Kommers said.
Uralkali competes with Canadian Potash Corp of Saskatchewan for the mantle of the world’s biggest fertilizer producer after it merged with Russian rival Silvinit in 2011.
In February, Russian and Belarussian potash producers agreed to sell 700,000 tonnes of the yield boosting soil nutrient, with a mutual option for an additional 300,000 tonnes in the first half of 2013 for $400 per tonne.
Uralkali, controlled by businessman Suleiman Kerimov, said in April it expected potash prices to rebound in 2013.