UPDATE 2-Potash Corp resumes some U.S. sales, boosts price
(Adds details. Prices in U.S. dollars unless noted)
WINNIPEG, Manitoba, Nov 7 (Reuters) - Potash Corp of Saskatchewan Inc (POT.TO) resumed pricing U.S. potash sales on Wednesday after a temporary suspension caused by fears that a Russian competitor might face shipping interruptions in a tight market, a spokeswoman said.
Potash Corp, the world's largest fertilizer company, raised its prices for U.S. customers by $50 per short ton or more than 19 percent for January and February shipments, but is not pricing sales beyond the end of February as it continues to evaluate market conditions, spokeswoman Rhonda Speiss said.
"We are working with customers on their requirements for '08, and taking orders, we're just not pricing them (beyond February)" Speiss said in an interview.
Surging grain prices have fueled demand this year for yield-boosting fertilizers, which are in short supply around the world, sending fertilizer shares to record highs.
Potash stock closed C$2.38 higher at C$114.76 on the Toronto Stock Exchange on Wednesday after earlier trading as high as C$115.62.
The stock hit a record C$118.28 in late October after Russian producer Silvinit (SILV.RTS), which supplies about 10 percent of world potash, raised supply concerns that caused Potash Corp and others to suspend sales.
The news came ahead of annual contract negotiations between major exporters and China, the largest volume buyer of potash, which has been paying significantly lower prices for its supplies than the rising spot market.
Silvinit had been worried a rapidly growing sinkhole caused by a flooded mine might threaten the rail line on which it transports its product.
But on Tuesday, Silvinit said the sinkhole growth was expanding at a slower pace, and rail officials said they planned to have an emergency bypass in place by Jan. 1. [nL06524743]
Earlier on Wednesday, Russian potash miner Uralkali announced it would resume sales, and announced price increases for Asian and Brazilian markets. [nL07817764]
Potash Corp continues to watch the situation, Speiss said.
"We don't know what's going to happen with that sinkhole over there. All we really know is that right now, it poses a potential risk to the supply situation ... in a market that is already tight," she said.
Potash and other fertilizer makers are supplying customers through allocation because they cannot provide as much quantity as customers would like, and North American inventories are at record lows.
This is the third price increase in the past few months for potash, which is used heavily in the U.S. cornbelt. Continued...
