SASKATOON, SK PRNewswire-FirstCall – Potash Corporation of Saskatchewan Inc. (PotashCorp) today reported that Canpotex Limited has signed a 1.5 million tonne contract with Sinochem, China's largest potash importer, for 2004 sales. This agreement represents the first year of its three-year Memorandum of Understanding signed in August 2003. The agreement includes a 10 percent option and provides a price increase of US $3.00 per tonne. China purchases product in Vancouver and is responsible for ocean freight costs, which have risen dramatically in 2003. This price increase reflects a higher realized price for potash, rather than an offset against ocean freight.
The objective for Canpotex now is to raise the prices for offshore customers that purchase potash with freight costs included to bring all company realized prices at least into parity with China. This effort should reverse the realized price deterioration seen in offshore sales during 2003.
Canpotex is the offshore sales agency for Saskatchewan potash producers and PotashCorp is its largest member, supplying 54.2 percent of its total sales volume.
Potash Corporation of Saskatchewan Inc. is the world's largest fertilizer enterprise producing the three primary plant nutrients and a leading supplier to three distinct market categories: agriculture, with the largest capacity in the world in potash, fourth largest in phosphate and third largest in nitrogen; animal nutrition, with the world's largest capacity in phosphate feed ingredients; and industrial chemicals, as the largest global producer of industrial nitrogen products and one of only three North American suppliers of industrial phosphates.
For further information please contact:
Senior Vice President, Corporate Relations
Phone: (306) 933-8521
Fax: (306) 933-8844
This release contains forward-looking statements, which involve risks and uncertainties, including those referred to in the Company's annual report to shareholders for 2002 and in filings with the U.S. Securities and Exchange Commission. A number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, fluctuation in supply and demand in fertilizer, sulfur and petrochemical markets; changes in competitive pressures, including pricing pressures; risks associated with natural gas and other hedging activities; changes in capital markets; changes in currency and exchange rates; unexpected geological or environmental conditions; and government policy changes.
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