* Shares up sharply in early trading
* Potash fundamentals, contract settlement seen bullish
* Other fertilizer stocks also rise
(Recasts, adds analyst's' comments and share prices. In U.S.
dollars unless noted)
WINNIPEG, Manitoba, Jan 5 Shares in several
major North American potash producers jumped on Tuesday after
Credit Suisse upgraded its rating on Potash Corp of
Saskatchewan Inc (POT.TO) shares to "outperform".
Credit Suisse said China's recent deal to buy potash at
$350 per tonne should benefit Potash Corp and other producers
of the soil nutrient in the long term. It also upgraded
Intrepid Potash Inc (IPI.N) to "neutral" from "underperform".
Last month, Belarussian Potash Company, or BPC, a major
potash exporter based in Minsk, agreed to sell more than 1
million tonnes of potash to China at $350 a tonne in a deal
that was widely expected to help restore demand for the
"We expect improved pricing visibility, favorable farmer
economics, and the now-attractive price of potash relative to
corn should drive solid demand recovery," the brokerage said in
a note to clients.
Credit Suisse also said the Chinese contract settlement
provided a long awaited price floor that should improve
fundamentals in the sector.
Shares of Potash Corp, the world's biggest producer of the
fertilizer nutrient, were up 4.8 percent to C$122.30 on the
Toronto Stock Exchange and up 5 percent to $117.90 in New
Shares of Intrepid Potash rose more than 3 percent to
$31.41 in New York.
The surge in share prices is due to the Credit Suisse
upgrade of Potash to "outperform" from "neutral" and general
bullishness about fundamentals, said Edlain Rodriguez, an
analyst at New York-based Broadpoint Gleacher Inc.
"2010 fundamentals should improve significantly and I think
that's giving people more confidence as we get into the
seasonally strong spring," he said in an interview.
Other major North American potash producers also traded
higher. Agrium (AGU.TO) (AGU.N) was up 3.4 per cent at C$67.77
in Toronto and 4 percent higher at $65.34 in New York, while
Mosaic Co's (MOS.N) shares gained 2.5 percent to $63.26 in New
The rise in fertilizer stocks isn't limited to potash.
Shares in Terra Industries TRA.N, a nitrogen producer, were
up 3.8 percent to $34.82 in New York.
Price settlement with China, one of the world's major
potash consumers, was eagerly awaited because it is seen as an
industry benchmark. China has not yet agreed to terms with
Canpotex, an export marketing agency for major Canadian
BPC's deal with China had led Potash Corp to cut prices on
Dec. 28, which pushed its shares down 2.2 percent the following
day in Toronto.
(Reporting by Koustav Samanta in Bangalore and Rod Nickel in
Winnipeg, editing by Peter Galloway)