PotashCorp Announces Completion of Sales Agreement Between Canpotex, Sinofert
Potash Corporation of Saskatchewan Inc. announced that Canpotex Limited, the offshore marketing company for Saskatchewan potash producers, and Sinofert, a leading fertilizer enterprise in the People's Republic of China (PRC), have reached an agreement for shipments to China covering the August to December 2006 shipping period. The agreement calls for a base price increase of US $25.00 per tonne over the 2005 contract price. Because of the late settlement, the short shipping period and the unknown impact of both of these factors on Chinese demand, the tonnages under the contract and the shipping schedule itself are to be finalized in an evolving manner over the remainder of 2006. Both parties will put forth mutual best efforts at meeting the content and the spirit of the existing Memorandum of Understanding between the two companies, which governs potash market share in China.
"This agreement is a continuation of the strong and mutually beneficial partnership between Canpotex and Sinofert," said Bill Doyle, President and Chief Executive Officer of PotashCorp. "We are pleased that a significant price increase has been put in place for this year, which essentially has five shipping months remaining. Given depleted potash stocks at the consumer level around the world, we look forward to strong demand for the balance of this year and through 2007."
PotashCorp owns one-third of Canpotex and, under a pro rata agreement with allocation of sales and costs based on proportionate share of Saskatchewan potash capacity, is entitled to supply Canpotex with 55.8 percent of its potash. PotashCorp also owns 20 percent of Sinofert, one of the largest importers of fertilizer products in the PRC in terms of import volume.
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