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Potash drilled from the earth is carried up to the surface on a conveyor belt. (DAVID STOBBE)
Potash drilled from the earth is carried up to the surface on a conveyor belt. (DAVID STOBBE)


Potash may hit spot market for China sales Add to ...

Potash Corp. of Saskatchewan may resort to selling fertilizer to China on the spot market instead of negotiating a long-term contract if the two sides can't renew a three-year supply deal that expires soon, says president and chief executive officer Bill Doyle.

"We are in the third and final year of our contract with the Chinese and at the Canpotex (fertilizer export company) board meeting in the fall we'll decide whether or not we have another contract," Mr. Doyle told a minerals and materials conference yesterday.

"We may go to spot and for moral reasons more than anything else, just to take some of the speculation out of the business."

Canadian fertilizer companies such as Potash Corp., Agrium Inc. of Calgary and Mosaic Canada have long negotiated long-term deals through marketing company Canpotex Inc. with China, India and other buyers.

Canpotex is the world's largest exporter of potash fertilizer, delivering between nine million and 10 million tonnes a year of Saskatchewan potash to global buyers.

"A lot of the analyst community hold their breath every time these contracts come up, and they get so focused, maybe too focused on these contracts when you consider the size of the business they represent for us," Mr. Doyle added.

"China is about 12 per cent of our total business so we have a lot of countries and customers that are a similar size.

"If we can maybe take some of the confrontational aspects out of the contract negotiations, I think that would be good. We haven't made a formal decision of course, that will be done at the board level of Canpotex, but there's a lot of questions whether we'll go ahead with another contract."

Report on Business Company Snapshot is available for: POTASH CORPORATION OF SASKATCHEWAN INC.

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