Potash sales consortium Canpotex announced new 3-year deal with Sinofert

SASKATOON – Canpotex Ltd. says it has a new three-year memorandum of understanding with Sinochem Fertilizer Macao Commercial Offshore Ltd. calling for the sale of a minimum of 1.9 million tonnes of red standard grade potash over the term of the agreement.

In addition, Sinofert has the option to purchase up to 2.4 million tonnes, or 800,000 metric tons per year, of other grades of potash during the term of the MOU, according to a statement issued Monday by Canpotex, the offshore sales arm of some of Canada’s leading potash producers.

Pricing will be negotiated every six months (January to June and July to December), based on market conditions, according to a release.

The agreement covers the period Jan. 1, 2015, to Dec. 31, 2017

Canpotex said the deal is “designed to encourage future growth in new Canpotex product grades and new market regions in China as it provides exclusivity to Sinofert for Canpotex red standard grade potash only, provided Sinofert exercises the annual minimum purchase requirements.”

Canpotex president and CEO Steve Dechka says the agreement signifies Canpotex’s ongoing commitment to the growing China market.

“We have been supplying Saskatchewan potash to China since 1972, and with this agreement we will continue to be a leading supplier to this growing market,” he said.

Canpotex is the exclusive offshore marketing company owned by three Saskatchewan potash producers, PotashCorp (TSX:POT), Agrium (TSX:AGU) and Mosiac (NYSE:MOS).