UPDATE 1-Canpotex inks contract with Japanese potash importers

* New contract priced at over $700/tonne, delivered basis

* New contract about $200/tonne below prior contract price

TORONTO, June 30 (Reuters) - Potash Corp of Saskatchewan (POT.TO) (POT.N) said on Tuesday its export consortium Canpotex has signed a contract with Japanese customers covering potash shipments for the second half of 2009.

Potash Corp, the world's largest fertilizer maker, said the new contract priced at over $700 a tonne on a delivered basis.

The pricing of the new Japanese contract is about $200 per tonne below last year's contract with Japanese importers, but still slightly above recent potash pricing levels in Europe.

The price of potash -- a key crop nutrient -- has remained stubbornly high even as demand has collapsed, as a small group of companies, which account for roughly 75 percent of global potash supply, have drastically cut production in a bid to maintain pricing.

But, pricing has begun to show signs of weakening in recent weeks.

Earlier this month, Germany's K+S (SDFG.DE) said that high potash prices were "unsustainable" given current market conditions. K+S cut both its pricing and production at the time.

K+S cut the European price of granulated potassium chloride, the fertilizer mineral extracted from potash ore, to 435 euros per tonne ($609) from 555 euros ($777) per tonne previously and added that overseas prices were also slipping. ($1=$1.16 Canadian) (Reporting by Euan Rocha in Toronto; Editing Bernard Orr)