* Tone of pricing set with China - CEO
* Canpotex deal to give India discount
* Sees 2013 global potash shipments 54-56 mln tonnes
* Agrium not considering spinoff of potash business
By Rod Nickel
Jan 30 Canadian fertilizer company Agrium Inc
expects North American potash producers to strike a
deal with Indian importers in February or March, ending a long
standoff, Chief Executive Mike Wilson said on Wednesday.
Agrium, along with rivals Potash Corp of
Saskatchewan and Mosaic Co sell potash to
off-shore markets through the jointly owned Canpotex Ltd.
Canpotex negotiates contracts with buyers in China and
India, setting a floor for spot sales to other markets such as
China held out months longer than expected before agreeing
to a six-month potash contract with Canpotex in late December,
while India remains on the sidelines.
"The tone of the pricing has been set with China so it's not
to any huge advantage for India to hold out," Wilson said in an
interview with Reuters. "They're not going to do any better in
my view. China set the floor from which we're going to go
A subsidiary of China's Sinofert Holdings Ltd
agreed to buy 1 million tonnes of potash during the first half
of 2013 at an estimated $400 per tonne, a 15 percent discount
from the previous Canpotex contract.
India stopped buying last year after a reduction in
government subsidies made the fertilizer too pricey for some
farmers. Indian importers have also said they have ample potash
supplies currently, and don't need to sign any contracts until
Wilson said he doesn't believe that.
"I think their inventories have actually come down quite a
bit and they'd be taking a risk by waiting that long. They won't
do it, but they'd be taking a fair risk," he said.
Wilson concedes that the next Canpotex contract will include
a price decrease for India and that "it's just a question of
what the number is." It's also likely to be a large volume, he
"I would think the Chinese and the Indians realize we've hit
the floor and are starting to turn around, so they'll try to
maximize their volumes."
India's return will be the key factor in how much global
potash shipments will rebound in 2013, Wilson said. A prolonged
Indian absence from buying could result in shipments of around
54 million tonnes, but a quicker return might push sales to 56
million, he said.
Global potash shipments in 2012 were an estimated 51 million
to 52 million tonnes.
Agrium is resisting pressure from its largest shareholder,
hedge fund Jana Partners, to sell off its retail division. But
Wilson said the Calgary, Alberta-based company isn't looking to
spin off its potash business either.
"The potash business is very valuable for us ... I don't see
anyone giving us an offer. We haven't looked at spinning off our
Agrium operates one potash mine at Vanscoy, Saskatchewan,
and is also one of the world's biggest nitrogen producers.
Agrium shares closed slightly higher in New York and Toronto
on Wednesday. They hit a record high earlier this week.