February 3, 2010 / 11:49 AM / in 9 years

REFILE-UPDATE 1-K+S says potash demand strong after price cuts

(Corrects to add definite article in first paragraph; also repeats to additional subscriber services)

* K+S says fertiliser wholesalers have accepted new price

* Demand from farmers in end markets will be seen in spring

* Shares extend gains, up 2.7 percent

(Adds details, background)

FRANKFURT, Feb 3 (Reuters) - German salt miner K+S SDFG.DE said a January price cut for its main product potash has triggered strong demand from fertiliser wholesalers, adding to signals that the embattled market for the key crop nutrient is recovering.

“Since the price change we are seeing very strong demand. The new price is being accepted,” a K+S spokesman said on Wednesday.

It remains to be seen, however, whether European farmers, who are due to start applying potash to fields in the spring, will follow suit, he added.

The shares extended gains and were up 2.7 percent at 43.1 euros at 1125 GMT, while Germany's benchmark DAX index .GDAXI was up 0.2 percent.

The recent spell of cold weather and snow have led to some disruptions in hauling fertiliser products to ports and to wholesalers, the spokesman also said.

K+S, the world’s fourth-largest potash supplier, said on Jan. 8 the potash price might have bottomed out after cutting prices to 285 euros ($396.5) per tonne for Europe, its largest market.

K+S planned to raise the price to at least 295 euros per tonne in March, it said at the time.

The market for potash, a key crop nutrient alongside phosphorus and nitrogen, is slowly recovering after China, the world’s largest user, struck a bellwether procurement deal with Belarussian Potash Company (BPC) in December.

Also on Wednesday, major potash exporter BPC said it raised spot prices for Brazil and Asia by over 6 percent, reflecting growing world demand for the soil nutrient, and planned to strike its next deals at the end of March or in April. [ID:nLDE6120XC]

BPC, based in Minsk, is the exclusive export agent for Russian potash miner Uralkali (URKA.MM).

Global suppliers, dominated by Canadian and Russian miners such as Uralkali, Potash Corp POT.TO and Mosaic (MOS.N), had reined in production amid protracted talks with China. (Reporting by Ludwig Burger) ($1=.7188 Euro)

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