The export marketing arm for the major producers of Saskatchewan potash has dropped back its contracted price for shipments to Japan by about $200 per tonne, the Reuters news agency reports.
Canpotex, owned by PotashCorp, Agrium and the Mosaic Co., announced in a statement Tuesday on Saskatoon-based PotashCorp’s website that it had concluded new potash pricing agreements with Japanese contract customers covering shipments for the second half of 2009.
The new contract agreements, Canpotex said, “reflect an average delivered price of over $700” per tonne.
Euan Rocha of Reuters in Toronto observed that the pricing of the new Japanese contract is about $200 per tonne below last year’s contract with Japanese importers. But the new average price is still slightly above recent pricing levels seen in Europe, Reuters noted.
Reuters’ Rocha noted that potash prices have remained “stubbornly high even as demand has collapsed, as a small group of companies, which account for roughly 75 per cent of global potash supply, have drastically cut production in a bid to maintain pricing.”
Reuters also observed, however, that potash pricing has recently started to show signs of weakness. The news service noted that earlier in June, German fertilizer firm K+S went on the record as saying high potash prices were “unsustainable” given current market conditions.
K+S, Reuters said, has cut not only its production but its pricing, to US$609 from US$777 per tonne for granulated potassium chloride.