OREANDA-NEWS. August 12, 2011. Uralkali’s BPC has signed a potash supply agreement with another Indian company, Zuari Industries. Uralkali will supply 400,000 tonnes of potash over Aug 2011 – Mar 2012 with the potash price set at USD 490/tonne. 

Bottom line

We view the news as moderately positive for Uralkali. We note that last week BPC announced that it had reached an agreement with Indian Potash Ltd to supply 1.2mn tonnes of potash over Aug 2011 – Mar 2012 with the potash price set at USD 490/tonne.  BPC has managed to realise an over USD 100/tonne potash price increase vs the previous price of USD 370/tonne under the contract which expired in Mar 2011. Nevertheless we note that the news comes right after Canpotex signed a six-month contract with Indian Potash Ltd with the potash price fixed at USD 470/tonne in 4Q11 and USD 530/tonne in 1Q12. Therefore, we believe that Uralkali’s current share price already reflects the new price for India.