* Uralkali in JV with Malaysian FELDA to boost potash sales
* JV to sell at least 1 mln T in southeast Asia a year
* No clarity on future of FELDA imports from Canpotex
By Polina Devitt and Anuradha Raghu
MOSCOW/KUALA LUMPUR, Dec 9 Russia's Uralkali
, the world's top potash producer, has agreed a supply
deal with Malaysia's state-owned plantation owner, the latest
move in a global battle over pricing and market share between
makers of the crop ingredient.
Uralkali said on Monday it had formed a joint venture with
the Federal Land Development Authority of Malaysia (FELDA) which
would secure potash deliveries to plantations including those
owned by FELDA in Malaysia and other countries.
The deal could boost Uralkali's sales in Malaysia and
Indonesia, a major market for potash due to demand from the palm
oil industry. Uralkali's sales in the region were only 200,000
tonnes in the first half of 2013 compared with 1.2 million
tonnes in 2012 as a whole.
Uralkali's move comes amid rising competition among potash
producers, fuelled earlier this year by Uralkali itself when it
quit a cartel of producers based in Russia and Belarus which had
controlled 40 percent of the $20 billion global potash market.
The withdrawal from the cartel hit global prices of the soil
nutrient and left a group called Canpotex - owned by Potash Corp
of Saskatchewan, Mosaic Co and Agrium Inc
- as the world's top export group.
Potash Corp spokesman Bill Johnson said neither the company
nor Canpotex had any comment on the deal.
Canpotex has offered potash at reduced prices, biting into
rivals' share of the Malaysian and Indonesian markets, sources
close to the matter told Reuters earlier this year.
Canpotex had in 2010 signed a five-year memorandum of
understanding with Indonesian buyers to supply a total of 3.75
million tonnes of potash, which made it the country's biggest
supplier. Speaking during a briefing in Kuala Lumpur, FELDA
officials declined to say whether the body would stop buying
"This (Malaysian) joint venture is another step to further
improve our sales net in southeast Asia, which is a
strategically important region for Uralkali," Viktor Belyakov,
Uralkali's acting chief executive, said in a statement.
The venture involves securing at least 1 million tonnes of
Uralkali's potash sales to southeast Asia per year, FELDA
Director-General Ahmad Faizoull told reporters.
"They need us and we need them. If we did not grab this
opportunity, we might be paying more for potash," Faizoull
Neither Uralkali or FELDA said what price would be paid for
the potash being supplied under the agreement.
Shares of Canpotex partners Potash Corp of Saskatchewan,
Mosaic Co and Agrium Inc were down less than 1 percent in early
trading. Uralkali shares in Moscow were down 0.7 percent at
Malaysia and Indonesia supply about 90 percent of the
world's palm oil. FELDA is a major shareholder of Felda Global
Ventures Holdings Bhd (FGV), the world's third-largest
palm plantation operator.
Other Malaysian palm oil planters include Sime Darby
, IOI Corp, IJM Plantations and
Kuala Lumpur Kepong.
Major palm oil firms operating in Indonesia include PT Sinar
Mas Agro Resources and Technology and Singapore-based
Wilmar International Ltd.