* Shares up 3.6 percent in afternoon trade
TORONTO, Jan 6 (Reuters) - Fertilizer producer Mosaic Co (MOS.N) said on Wednesday it expects shipments of potash to increase in 2010 following dismal demand for the crop nutrient in 2009.
The company expects global potash shipments of 47 million tonnes to 50 million tonnes in 2010, compared with global sales of about 32 million tonnes in 2009, a company executive said on Mosaic’s second quarter conference call.
Potash inventories rose steadily through most of 2009, despite major production cuts, as farmers, concerned about exorbitant pricing and hurt by the credit crunch, deferred fertilizer application.
Buyers of the nutrient were also staying out of the market in anticipation of big annual import contracts signed by India and China, which typically set the tone for spot market pricing.
In July, India inked contracts to import potash at a delivered price of $460 a tonne. Chinese importers only weeks ago agreed to buy potash from the European export consortium Belarussian Potash Co for a delivered price of $350 a tonne.
Canpotex, the export arm of North American producers Potash Corp POT.TO, Mosaic and Agrium Inc AGU.TO, has yet to finalize a contract with Chinese importers.
Mosaic Chief Executive Jim Prokopanko signaled that Canpotex was unwilling to settle with Chinese importers at the $350 price.
“We’re not prepared to meet the kind of price expectations the Chinese have and we continue to discuss and negotiate a contract,” Prokopanko said.
Mosaic, in a regulatory filing, noted that potash selling prices in the third quarter of its fiscal 2010 will be below second quarter fiscal 2010 levels.
Shares of the company closed 3.8 percent higher at $65.57 on the New York Stock Exchange on Wednesday. (Reporting by Euan Rocha; editing by Peter Galloway)