U.S. Gulf:
Potash barge prices continued to move up, with sources calling February business in the $270-$282/st FOB range, up from the week-ago $260-$272/st FOB. March sales were reported to have occurred in the $292-$300/st FOB range.
Eastern Cornbelt:
The potash market remained at $305-$330/st FOB in the Eastern Cornbelt, with the low out of spot river locations and the high reflecting inland warehouse postings from Canadian producers for Q2 tons. Sources pegged the Cincinnati market in a broad range at $305-$325/st FOB in early February, with the East Dubuque market quoted at the $315/st FOB level for spring.
“It won’t surprise me if another price increase happens at any point,” said one regional contact. In fact, as Green Markets went to press, unconfirmed reports were circulating that a Canadian producer had raised prices by $50/st on Feb. 5.
Western Cornbelt:
The potash market was pegged at $305-$330/st FOB regional warehouses in the Western Cornbelt, with the low confirmed at St. Louis. The St. Paul market was quoted at $315-$330/st FOB in early February.
California:
Potash reference prices in California remained firmly at the $455/st FOB level for 60 percent MOP and $465/st FOB for 62 percent. Some sources reporting booking prompt tons for as low as $400/st FOB local warehouses earlier in the year, but those deals were now off the table.
Pacific Northwest:
Potash was pegged at $400-$412/st FOB regional warehouses in the Pacific Northwest, depending on grade and location, with rail-DEL tons reported in roughly the same range. Potash postings FOB Moab and Wendover, Utah, remained at $375/st FOB for 60 percent white standard and $380/st FOB for 60 percent white granular.
Western Canada:
Western Canada sources reported potash pricing firmly at C$470-$480/mt FOB Saskatchewan mines for prompt or spring tons, with earlier offers of C$430-$435/mt for Q1 material no longer available.
India:
Canpotex, Nutrien, Uralkali, and K+S Group have all stated that the new annual contract price of $247/mt CFR reached between Belarus Potash Co. (BPC) and India’s biggest potash importer, Indian Potash Ltd. (IPL), is not reflective of current market trends. The new contract was announced on Jan. 29 (GM Jan. 29, p. 17).
“This would be significantly below current market levels for potash in key offshore markets and a complete disconnect from the strong fundamentals currently being seen for major agricultural commodities in numerous growing regions throughout the world,” Canpotex said.
“Canpotex is fully committed on volumes for potash sales through April 2021 even without a new contract settlement with our customers in India,” the export organization said. “Record potash shipments were made in 2020, and we anticipate further export market demand growth in 2021.”
Canpotex was the first company to settle a new potash supply contract with India last year, agreeing to new contracts with IPL in mid-May for potash shipments through Dec. 31, 2020 (GM May 15, 2020). The latest India contract settlement between BPC and IPL is a $17/mt CFR increase on the 2020 contract price.
Nutrien Ltd., a member of Canpotex, said on Jan 30 it is fully aligned with Canpotex’s view of the new contract. “We understand that the potash agreement with India was settled at the highest government level with limited commercial involvement,” said Ken Seitz, Nutrien Potash Executive Vice President and CEO. “This contract price in no way reflects the market-based pricing in the current key offshore potash markets which, like other fertilizers, is being supported by strong global crop fundamentals.”
Seitz said Nutrien supports Canpotex’s position to not follow this price level for potential sales into India in 2021. Nutrien also confirmed that it is now fully committed on potash sales to North America through April 2021, in addition to offshore sales volumes with Canpotex. It is significant that these offshore commitments through April do not include any shipments to India or China, the company said.
K+S Group also does not believe the new contract supply price reflects market conditions, and reported on Feb. 2 that it will refrain from deliveries to India until further notice given that “very favorable demand for potash fertilizers can be observed worldwide in all important sales regions for the upcoming spring season.”
K+S normally does not supply large volumes of potash to India. India typically imports 4.0-4.5 million mt of potash per year, with 100,000-150,000 mt of that total coming from Germany, according to Trade Data Monitor. K+S now has the option of shipping potash from its Bethune project in Saskatchewan, however.
Uralkali also is unhappy with the new India price. “Considering the positive market conditions demonstrated in the second half of 2020 and early 2021, as well as the continuous growth in demand for potassium chloride in the main consumer markets this year, Uralkali believes that the price of the contract signed with India is not in line with the current market trends, and does not meet the interests of leading producers of potash fertilizers,” said Uralkali Trading CEO Alexander Terletskiy.
ICL and Arab Potash Co. (APC) have not publicly commented on the new BPC-IPL deal. Last May, ICL agreed to supply contracts with IPL for an aggregate 410,000 mt of potash, with mutual options for an additional 30,000 mt to be supplied through December 2020. APC did not disclose the volumes negotiated under its supply contract with IPL, which was also reached in May for shipments through 2020.
Brazil:
Prices for MOP jumped about $30/mt in one week, to $280-$295/mt CFR Paranagua, with new offers at $300/mt CFR.
Inland buyers remain uncertain as to what is going on. While prices are moving up, some farmers and farm groups are nervous that the barter rates do not appear to be shifting with the better prices they are slated to get for their crops.
The Rondonopolis MOP price increased on the upper end of the range to $365-$385/mt FOB ex-warehouse, showing the ability of some farmers to still secure a good deal at the lower end. At the same time, the widening of the range also indicates sellers are expecting more for their product and are getting it.
The barter rate for 1 mt of MOP remained stable at 39 bags of corn and 20 bags of soybeans.