Agrium expects hike in China potash price

By Leah Schnurr

TORONTO (Reuters) - Annual contract talks with China, the world's largest potash fertilizer consumer, will likely result in prices similar to what India recently agreed to pay, the chief executive of Agrium Inc said on Wednesday.

"We would expect them to be paying the equivalent of a landed price of $625" per tonne, Mike Wilson said in an interview on the sidelines of a fertilizer conference.

Major potash producers in Russia and Canada last week secured a deal to sell potash at $625 per tonne (delivered) to India -- a contract normally settled after China negotiates its annual deal.

The contract was more than double last year's contract price.

Calgary, Alberta-based Agrium is part of Canpotex, the offshore marketing arm for potash producers including Potash Corp and Mosaic Co.

The deal prompted a hike in spot potash prices from Canpotex and other exporters to Brazil and Asian countries to $750 per tonne, effective June 1.

Wilson told the conference it isn't clear when negotiations will conclude, but said if China waits until the third quarter, it would risk depleting its stocks by the end of the year.

"What are they going to do going into the next round of negotiations? They're going to have zero inventory," Wilson said. "I can't see them getting into the October time frame."