Canpotex Limited, the offshore marketing company jointly owned by Potash Corporation of Saskatchewan Inc. ( POT ), Agrium Inc. ( AGU ) and The Mosaic Company ( MOS ), announced that it has signed a deal with Sinochem Fertilizer Macao Commercial Offshore Limited, a subsidiary of China's Sinofert Holdings Limited (Sinofert), to supply one million tons of potash in the first half of 2013.
The deal was made under a three-year Memorandum of Understanding with Sinofert, signed in October 2010. The price under the new agreement reflects a $70 per ton reduction compared to the same under the previous agreement established in March last year.
Sinofert Holdings Limited is the largest supplier and distributor of fertilizers in China, covering the whole industry chain of resources, R&D, production, distribution, and agrochemical services. Canpotex is the world's largest exporter of potash as well as an international marketing and distribution company. Potash is a major raw material for fertilisers that are used to stimulate plant growth, especially food crops.
Potash Corporation, also known as Potash Corp., is a Canadian corporation based in Saskatchewan. The company is the world's largest producer of potash and the third largest producer of nitrogen and phosphate - three primary crop nutrients used to produce fertilizers.
In October 2012, Potash Corp. released its third-quarter 2012 results. The company's earnings came in at 74 cents per share, surpassing the Zacks Consensus Estimate by a penny, but falling well short of the year-ago earnings of 94 cents.
Sales in the quarter came in at $2,143 million, down 7.7% from $2,321 million a year ago, but beat the Zacks Consensus Estimate of $2,026 million. The year-over-year decline was due to reduced offshore potash sales arising from the delay of new supply contracts with China and India.
Potash Corp. retains a Zacks #4 Rank, reflecting a short-term (1 to 3 months) Sell rating. Currently, we have a long-term (more than 6 months) Neutral recommendation on the stock.