* Pricing on Chinese potash contract rises about 17.5 pct
* New China contract puts pressure on Indian potash buyers
* Shares of Potash Corp, Mosaic, Agrium rise on NYSE (In U.S. dollars, unless noted)
By Euan Rocha
TORONTO, June 29 Potash export consortium Canpotex will supply China with 630,000 tonnes of the crop nutrient in the second half of 2011 at higher prices, Canpotex said on Wednesday.
The consortium, which is jointly owned by Potash Corp (POT.TO), Mosaic Co (MOS.N) and Agrium Inc (AGU.TO), indicated the price on the new contract with China's Sinofert Holdings (0297.HK) rose about 17.5 percent over previous contract levels to about $470 a tonne.
The Canpotex deal follows an announcement by Belarusian Potash Co that it had agreed to sell a minimum of 500,000 tonnes to China with options to sell another 200,000 tonnes at $470 a tonne on a cost-and-freight basis. [ID:nLDE75S0FO]
Most analysts had expected China to settle at a price of $450 a tonne, and the better than expected pricing pushed shares of Potash Corp, Mosaic and Agrium higher in early trading on Wednesday.
While potash prices in North America have risen sharply over the last year, price increases in overseas markets have been harder to come by. The Chinese contract is closely watched by analysts, as other big potash importers such as India typically pay a premium on the Chinese import price.
"Everyone was expecting $450, so $470 is definitely better than expected and it shows that the market is tight. This is definitely going to put more pressure on India," said Gleacher & Co analyst Edlain Rodriguez.
Canpotex and its Belarusian counterpart BPC, which markets potash for producers Uralkali (URKA.MM) and Belaruskali, each account for more than 30 percent of global potash exports.
Last year, Canpotex signed a three-year memorandum of understanding (MOU) with Chinese agricultural giant Sinofert. The new potash supply contract is the second contract concluded under the terms of that MOU.
The contract volumes are at the low end of the MOU range reflecting Canpotex's tight potash supply position, the group said in a statement.
Canpotex said it is now fully committed for sales in the third quarter of 2011, and it also has significant volumes confirmed for the fourth calendar quarter.
BPC is close to signing a potash supply deal with a major Indian buyer at above $500 a tonne, a source close to the talks told Reuters on Friday. [ID:nLDE75S0WQ]
If India does agree to a price of over $500 a tonne, this would be a big boost for Canadian potash miners, as Canpotex typically finalizes deals with Indian and Chinese buyers at prices similar to those fixed by BPC.
Shares of Potash Corp were up 2.9 percent at $56.53 in early trading on the New York Stock Exchange, while those of Mosaic and Agrium were up 1.7 percent and 0.7 percent, respectively. (Reporting by Euan Rocha; editing by Peter Galloway)