UPDATE 1-Agrium suspends new potash sales, watches Russia

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WINNIPEG, Manitoba, Oct 26 (Reuters) - Agrium Inc (AGU.TO) is holding back on new potash sales until it sees whether a sinkhole stalls rail shipments from Russian competitors, which would have a major market impact, a company spokesman said on Friday.

"We're not making any new major sales that are priced right now either, but we're pretty tight on inventory to begin with," Richard Downey said in an interview.

On Thursday, Potash Corp of Saskatchewan (POT.TO) announced it had suspended new potash sales because a sinkhole from a flooded potash mine threatened to halt shipments from Silvinit, a company accounting for about 10 percent of world supply.

Potash Corp, based in Saskatoon, Saskatchewan, is the world's largest producer of the nutrient.

Belarussian Potash Co, which exports potash for Russian producers Uralkali (URKA.RTS) and Belaruskali, followed suit on Friday.

Disruptions to the rail line serving Silvinit could also impede exports from other Russian companies, said Downey, director of investor relations for Calgary, Alberta-based Agrium, the smallest North American potash producer.

"If the rail line got interrupted over the next week or two, that would be pretty significant," Downey said. "You'd lose some of that export volume for a number of months."

Shares in fertilizer companies rose to new highs on Friday.

Potash stock was up 2 percent or C$2.10 at C$113.03 on the Toronto Stock Exchange, while Agrium was up 5.7 percent or C$3.17 at C$58.69.

U.S.-based Mosaic Co (MOS.N) was up 4.7 percent or $3.00 at $68.59 in New York.

($1=$0.96 Canadian)