Canpotex Ltd., the offshore marketing arm for Saskatchewan's major potash producers, has reached supply agreements with government and private sector customers in India.Canpotex said Thursday that the agreements call for it to supply about 1.1 million tonnes of potash for shipment up to January, 2014, at a price of $427 (U.S.) tonne.
News of the deal with India follows an announcement about a month or so ago with China for one million tonnes of the crop nutrient.
"We are very pleased to sign supply contracts with our long-term Indian customers and to continue our history of being a leading supplier to this important market," Canpotex president and chief executive officer Steven Dechka said in a release.
Mr. Dechka said Canpotex would also continue to collaborate with its Indian customers in implementing new market development programs designed to provide farmers there with the educational tools needed to improve yields through balanced fertilization and best management practices.
Canpotex is the exclusive offshore marketing company owned by the three Saskatchewan potash producing companies: Agrium Inc.; Mosaic Canada Crop Nutrition, LP, a subsidiary of Mosaic Co.; and Potash Corp. of Saskatchewan Inc.
Lower sales as a result of hesitation by international buyers while contracts were worked out with China and India were among reasons cited by Potash Corp. for lower revenue and earnings in its most recent quarter.
"The deferral of new potash contracts with China and India resulted in fewer tonnes being shipped to those countries," Potash CEO Bill Doyle told analysts in late January.
"This delay affected the psychology of buyers in other offshore markets, with many waiting for greater visibility rather than re-engaging and securing supply in the absence of immediate need."
In the case of India, part of the problem was the decision by the government there to cut fertilizer subsidies, making important nutrients less affordable for farmers.
Mr. Doyle called that a "penny-wise and pound foolish" decision, noting that India has 25 per cent of all the undernourished people in the world, including a third of all the undernourished children in the world.