Since the boom in potash prices collapsed in 2009, producers have cut production and waited for a rebound in demand, but after initial 2010 contract negotiations few are expecting an easy year.
The key potash contract between Belarusian Potash Co. (BPC) and Chinese importers was settled lower than many had forecasted in late December, causing analysts to slash price forecasts for the fertiliser mineral (IM 13 January 2009: Banks cut potash price outlook).
BPC – the export arm of Belaruskali and Russia’s Uralkali – agreed to sell 1.2m. tonnes of potash at $350/tonne CFR in a deal that will likely lead to lower spot contracts to other regions.
According to Alexei Morozov, a Moscow-based analyst at investment bank UBS, the contract should “lead to lower export spot prices in Brazil and south-east Asia in 2010, and a significant reduction in India’s contract when...