UPDATE 1-Canpotex signs potash contract with China's Sinofert

Fri Jan 24, 2014 8:57pm EST

Jan 24 (Reuters) - Canpotex Ltd, the offshore selling arm for three North American potash companies, said on Friday it has signed an agreement to supply the crop nutrient to Sinochem Fertilizer Macao Commercial Offshore Ltd (Sinofert), a subsidiary of China's Sinofert Holdings Ltd.

Canpotex, which is owned by Potash Corp of Saskatchewan , Mosaic Co and Agrium Inc, said it would supply Sinofert with 700,000 metric tonnes during the first half of 2014.

Canpotex, while not revealing the deal value, said it "is priced at current and competitive market levels."

Chief Executive Steven Dechka, said in a statement that the deal demonstrates the continued importance Canpotex places on the Chinese market.

Russian rival Uralkali OAO agreed on Jan. 20 to a six-month deal to sell Chinese buyers 700,000 tonnes of potash at $305 per tonne.

The Chinese contracts traditionally set a global price floor for potash.

China, the world's biggest grower of wheat and second-largest corn producer, is a key potash importer along with the United States, India and Brazil.

Potash importers have shied away from purchases since late July, when the globe's top potash producer by output, Russia's Uralkali, quit its export partnership with Belaruskali and announced a new emphasis on volume. Potash prices have since slipped, and buyers were gambling that they could fall further.

Canpotex's six-month agreement covering the first half of 2013 was for 1 million tonnes at an estimated $400 per tonne.