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Scotiabank: potash price up 30% since December will jump again this year

Spot potash prices for the standard grade leaving the port of Vancouver rose from $445 per tonne in May to $481 in June and $490 in July and is up US$111 since December according to the Scotiabank Commodity Price Index out on Wednesday.

Scotiabank also said Canpotex, the marketing agent for Western Canada’s three potash producers, is virtually sold out for the third quarter this year and a third price increase this year of $30 to $40 is likely.

Both BPC and Canpotex have successively raised prices in Brazil and Southeast Asia twice this year, given strong demand, with a third price increase (US$30-40) expected soon for fall application.

From January to May 2011, Brazilian MOP imports jumped 48% year on year, with Canada selling just over 1 million tonnes for a 35.1% market share (just below Belarus’ 38.8%).

Patricia Mohr of Scotia Economics said in the report: “In this environment, a free trade agreement with India on goods and services, combined with an investment accord, would be particularly welcome, opening up valuable opportunities for Canadian exporters and equally valuable opportunities for India. Canada’s Ministry of International Trade began negotiations with India in November 2010 and will resume discussions this Fall.”

MINING.com reported earlier in July that India’s Department of Fertilisers has raised concerns with the country’s Foreign Affairs minister on Thursday over 2011 prices set by Canpotex. India’s farming co-ops have halted imports due to the impasse over pricing. At over 6 million tonnes/year India is the biggest importer but says it pays much higher prices than a country like China can negotiate.