The North American potash partnership Canpotex has signed a memorandum of understanding with China’s largest potash importer, China National Chemicals Import & Export Corporation (Sinochem), to supply the latter with Saskatchewan potash.
Under deal’s terms, Canpotex will supply the Chinese market exclusively through Sinochem at a rate of at least 1.5 million tonnes, plus an additional 10% at Sinochem’s option, in each of the next three years, beginning in 2004.
The price paid for each year’s supply will be negotiated based on market circumstances.
The agreement also guarantees that Canpotex will maintain its historic market share over the 3-year term, since the China potash market is expected to expand during this time.
Based in Saskatoon, the Canpotex partnership was established in 1970 to be the exclusive offshore marketing company for its members, Saskatchewan’s potash producers.
The member companies are Saskatoon-based Potash Corporation of Saskatchewan (POT-T), Chicago-based IMC Global (IGL-N) and Calgary-based Agrium (AGU-T).
The three contribute potash to the partnership at rates of 54.2%, 36.7% and 9.1%, respectively.
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