By Leia Michele Toovey- Exclusive to Potash Investing News

For the past few weeks, I have finally been able to share good news about potash, and now, even more signs are pointing towards a revival in the market.  The latest news, this Monday, Canpotex, the marketing arm for North American potash producers, finally inked a deal with Sinofert, China’s largest fertilizer enterprise.

The deal is for 350,000 tonnes of potash, to be shipped before the end of March.  Canpotex claims that the potash is being sold at “competitive prices” but failed to mention the exact dollar figure.   Canpotex’s competitor, Belarusian Potash Co (BPC) struck a deal in December to supply Chinese buyers with potash at a delivered price of $350 a tonne.

Other exporters such as Israel Chemicals also met the rock bottom offering; however, Canpotex took an unprecedented move in refusing to sell for the bargain basement price.  Last week BPC signed deals to sell the crop nutrient to certain Brazilian and Asian clients for $410 per tonne, a 6 per cent hike.

Potash Attracts Investment

Just last year, potash began attracting the attention of the “major players” in the mining world; with both BHP and Vale newly involved in developing  potash interests. And this week, a few global investment firms have added potash to their portfolio. China Investment Corporation (CIC), one of the world’s largest sovereign wealth management firms is gaining a position in Potash Corp of Saskatchewan.

CIC claimed a holding of 50,000 shares of PotashCorp worth $5.4 million.  CIC is also investing in gold and copper via interests in Freeport McMoran Copper & Gold, AngloGold Ashanti, Gold Fields and Kinross. The World’s largest manufacturer and marketer of fertilizers in the cooperative sector, IFFCO has ventured into Potash, making it the first Indian enterprise to invest overseas into potash.  India has a strong demand for potash, and with zero reserves they import all of their required fertilizer.

Company News

Agrium Inc has posted Q4 2009 profits that shattered analysts’ expectations. Excluding some items, profit was 53 cents a share, whereas analysts had estimated 25 cents. Net income dropped to $30 million, or 19 cents a share, from $124 million, or 79 cents, a year earlier. Chief Executive Officer Michael Wilson announced today that the fertilizer business started a recovery late in the fourth quarter of 2009, and since then demand for potash coupled with tight supplies for nitrogen and phosphate nutrients have meant increasing sales for his company.

Canadian potash explorer MagIndustries Corporation is planning an equity financing to raise funds for the construction of its Mengo potash mine and production facility in the Republic of Congo. The offering, for an as-yet undisclosed number of shares, is being co-led by Cormark Securities Inc and BMO Capital Markets. The offering is scheduled to close sometime around February 24.

On February 1, MagIndustries signed an agreement with China National Complete Plant Import & Export Co to jointly develop the Mengo potash mine. A preliminary agreement between the parties provides for a $1.2 billion loan facility to MagIndustries repayable over a minimum of 10 years. The plant, to produce 1.2 million tonnes per year of potash once production starts in 2012, will supply the crop nutrient to South America, South Africa, South Asia and Europe.

Fertilizer producer Mosaic Co has forecasted higher potash volumes in the third quarter, and expects to be at the high end of its outlook range for phosphate sales volumes.”Signs suggest a recovery in demand for nutrients is underway. We expect shipments and applications to return to more normalized levels in calendar 2010,” the company said in a regulatory filing. Mosaic expects third-quarter potash sales volumes of 1.7 to 2 million metric tonnes, at a selling price of $340 to $360 per tonne. Second-quarter potash sales volume came in at 1 million tonnes. The company said it expects to be at the high end of its outlook range for phosphate sales volume of 2.2 to 2.6 million tonnes for the third quarter.