Canpotex strikes Chinese potash deal (August 18, 2003)

The North American potash partnership Canpotex will supply Saskatchewan potash to China’s largest potash importer, China National Chemicals Import & Export Corporation (Sinochem).

Under a memorandum of understanding, Canpotex will supply the Chinese market exclusively through Sinochem at the annual 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 three years, since the China potash market is expected to expand during this time.

Based in Saskatoon, the Canpotex partnership was established in 1970. It is the exclusive offshore marketing company for Saskatchewan’s potash producers. Members include Saskatoon-based Potash Corp. 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.