(Rewrites first paragraph, adds details on contracts, background, share price moves)
By Euan Rocha
NEW YORK, April 16 (Reuters) - Chinese fertilizer importers agreed on Wednesday to pay more than triple what they did a year ago for potash imports.
North American exporter Canpotex has agreed to sell potash in 2008 to Sinofert Holdings, the largest distributor of fertilizers in China, for $576 per tonne, a whopping $400 per tonne higher than the price it paid a year ago.
Canpotex is a venture of Potash Corp POT.TO, Mosaic Co (MOS.N) and Agrium Inc AGU.TO that exports potash produced by all three companies from the Canadian province of Saskatchewan.
Belarussian Potash Corp, the Russian counterpart of Canpotex, also agreed to raise prices to Chinese importers by $400 per tonne.
Last month, both Canpotex and Belarussian agreed to sell potash to India for $625 per tonne in 2008, more than double the price the country paid in 2007.
Booming demand for food grains across the globe, driven by the growing needs of developing economies and mandates for the increasing use of biofuels in the United States and Europe, have led to significant increases in the prices of agricultural crops and allied products.
Due to the timing of this settlement and demand in other markets, Canpotex has only 1 million tonnes to commit to Sinofert through the remainder of this year, Potash Corp said in a statement.
“Significantly higher potash prices and extraordinarily tight supply have become much more firmly entrenched since China’s previous contract was signed 14 months ago,” Potash Corp Chief Executive Bill Doyle said in a statement.
“This settlement highlights the importance of securing supply in an increasingly tight market,” he added.
China, which is the world’s largest importer of potash, usually buys the crop nutrient at a significant discount to other large importers like India and Brazil.
But this year China lost some of its pricing leverage as Indian importers, who normally price potash contracts after China, jumped ahead of the queue due to tight global supplies of the crop nutrient.
BPC, a joint venture between Uralkali URKAq.L and Belaruskali, agreed to ship around 1 million tonnes of potassium chloride by the end of 2008 to China’s two largest importers of mineral fertilizers, Sinochem and CNAMPGC.
Shares of Russia’s Uralkali rose more than 8 percent on the London Stock Exchange while those of Potash Corp, Mosaic and Agrium also rose following the announcements.
In trade before the bell, shares of Potash Corp were up 3 percent to $190, while those of Mosaic rose 2.9 percent to $131.25 and Agrium shares climbed 3.2 percent to $81.50. (Reporting by Euan Rocha, editing by Mark Porter)