China, the world’s largest consumer of potash fertilizer, still hasn’t signed an annual benchmark supply contract with foreign producers, spurring speculation that no agreement will be reached this year and that prices have further to fall.
Contracts were informally discussed by suppliers and buyers including China at the annual International Fertilizer Industry Association conference in Moscow this week, said two fertilizer-producer managers who attended the event and who asked not to be identified as the matter is private.
The managers said they don’t expect a contract to be signed soon. An agreement may be reached at the end of the summer but there’s a high chance of no deal at all, said Elena Sakhnova, a VTB Capital analyst in Moscow. The last time both sides failed to reach a supply contract was in 2009, a move that hastened a plunge in potash prices from a peak the previous year.
“China sits on above-normal...