March 20, 2012 / 4:07 PM / 5 years ago

UPDATE 1-Russia-Belarus potash producer inks deal with China

* BPC to supply up to 500,000 T potash to China

* Deal sets price at $470 per T, same as H2 contract (Adds details, BPC comment)

By Natalia Shurmina and Polina Devitt

MOSCOW, March 20 (Reuters) - Belarusian Potash Company (BPC), an agent and joint venture of producers Uralkali and Belaruskali, agreed to sell up to 500,000 tonnes of potash to China in the second quarter and kept the price unchanged from the second half of 2011.

The contract for 400,000 tonnes of potash and an option for another 100,000 tonnes priced the deliveries at $470 on a cost-and-freight basis.

The contract with state-owned oil and chemical companies Sinochem and CNAMPGC, China's biggest importers of mineral fertilisers, is valid from April 1 to June 30, Russia's Uralkali said on Tuesday. The company is the world's second-largest potash producer by capacity.

BPC said that the deal was signed at a time that buying has been rising gradually in its major markets, India and China.

"The macroeconomic risks are being reduced, the potash stock balance is also gradually declining and the agricultural commodities market is characterised by ... price growth," Valery Ivanov, BPC's chief executive officer, said in a statement.

The latest contract between China and BPC follows a similar deal for the second half of 2011, which included 500,000 tonnes of potash and another 200,000 tonnes as an option.

Potash prices are currently at around $500 per tonne, below levels of more than $1,000 recorded in 2008 but far above levels of $150 per tonne seen in the first half of the last decade.

Potash is a yield-boosting nutrient and is used to meet global consumption of agricultural commodities, which increases along with the world's population. (Writing by Polina Devitt; Editing by Andrey Ostroukh and Jane Baird)

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