* Sees benchmark China contract in Oct-Nov
* China shipments to resume after one-year gap
* Price not disclosed
* Signs Vietnam supply deals
(Adds details, quotes, background)
By Andrei Makhovsky
MINSK, Oct 16 (Reuters) - Belarussian Potash Company (BPC)
aims to ship 860,000 tonnes of potash to China in 2010, resuming
supplies of the soil nutrient to the world's biggest consumer
after a one-year gap, the company's head said on Friday.
BPC, which accounts for more than 30 percent of global
potash sales, plans to sign the benchmark contract with China
this month or next, General Director Vladimir Nikolayenko said.
He did not disclose the likely price.
BPC, the exclusive export agent of Russian potash miner
Uralkali, also plans to ship 300,000 tonnes of potash to Vietnam
next year, Nikolayenko told reporters.
The company has already signed a contract to supply 100,000
tonnes to Vietnam at $500 a tonne and plans to sign a second
deal, also worth $50 million, later on Friday. A third contract
for the final 100,000 tonnes is expected to follow later.
"Talks with China are in their final stage now. We plan to
sign the contract by the end of October or in November,"
Nikolayenko said. "We hope to keep supplies at 2008 levels. This
is around 860,000 tonnes."
BPC expects to increase its sales volumes by about 50
percent in 2010 from this year, as demand recovers in Europe and
Asia, the company's sales director, Oleg Petrov, told Reuters in
an interview last month.
The contract between BPC and China, which is returning to
the market to replenish stocks run down after its reluctance to
cede to record-high prices a year ago, is being closely watched
by the potash market as the benchmark for future deals.
Potash prices soared to more than $1,000 a tonne on the spot
market last year. When cash-strapped farmers stepped back from
the market, the small group of miners that controls three
quarters of global supply slashed output to help buoy prices.
Russian miner Silvinit shocked the market in July when it
agreed to sell potash fertilisers to India at $460 per tonne,
well below the spot market price of $700 at the time. BPC
quickly followed with an Indian deal at the same level.
But investors responded positively to the Indian contract,
as it set exports in motion again and could potentially spell a
return to higher production for Uralkali, Silvinit and other
major miners like Potash Corp of Saskatchewan.
Silvinit has said that, contrary to the Indian deal, it will
not be first to settle with China. A company source told Reuters
last month it would follow the lead of BPC.
BPC is a joint venture between Uralkali and Belaruskali.
To see a recent series of Reuters articles on the global
potash industry, please double-click on.
(Writing by Robin Paxton and Dmitry Zhdannikov)
