Major potash exporter BPC has raised spot prices for Brazil and Asia by over 6 per cent, reflecting growing world demand for the soil nutrient, and plans to strike its next deals at the end of March or in April.
Oleg Petrov, director of sales for Belarussian Potash Co., said Wednesday the company had increased its spot price for standard material to $410 (U.S.) per tonne from $385. The new price for granular material is $425 per tonne, up from $400.
"We can probably strike new deals at the end of March or in April, as we're completely sold out," Mr. Petrov told Reuters. "We have no products for February and most of March as a result of strong demand."
BPC, which accounts for more than 30 per cent of global potash sales, has forecast a 50 per cent increase in sales this year as global demand for the fertilizer ingredient bounces back from a barren 2009, when cash-strapped farmers ran down stocks.
The Minsk-based company is the exclusive export agent for Russian potash miner Uralkali.
Mr. Petrov said the prices would apply "until further notice."
BPC spokesman Filipp Gritskov said the prices would apply to the company's major customers in Brazil and Asia.
"While we had been expecting price increases on the spot markets, the timing came as a surprise," VTB Capital analyst Yelena Sakhnova said. "We only thought this would be possible in the second half of the year."
Potash prices ballooned to more than $1,000 a tonne on the spot market in 2008, making Uralkali and other top miners, such as Potash Corp of Saskatchewan , the darlings of stock market investors before the financial crisis struck.
Producers say farmers are returning to the market after last year's slump. Potash Corp CEO Bill Doyle said on Jan. 28 the firm sold more potash in North America in the first three weeks of 2010 than in the first eight months of 2009.
VTB Capital forecasts global potash demand could reach 49 million tonnes in 2010, more than BPC's forecast of 45 million tonnes.
Brazil could potentially consume about 7 million tonnes of potash this year, of which about 6.3 million tonnes may be imported. BPC traditionally supplies between 32 per cent and 33 per cent of Brazilian imports.
BPC's Mr. Petrov, in an interview with Reuters on Dec. 17, said India and Brazil were exerting growing influence on world potash markets as China - the world's largest consumer - steps up domestic production.
BPC agreed on Dec. 23 to sell up to 1.2 million tonnes of potash to China in 2010 at a contract price of $350 per tonne, but the company has said it might replace long-term contracts with spot deals when dealing with China from 2011.
"As we forecast in December, global demand for potash is hardening following the signing of the China price agreement and, as a result, we expect prices will continue to rise," Mr. Petrov said on Wednesday.