Reuters released a story on October 16th outlining a possible deal between Belarusian Potash Company and China for 860,000 tons of Potash.

The pricing has not been released but according to the article it will be in the ballpark of $500 per ton. This news has pushed all of the major North American potash producers higher.

Will this deal signal a comeback for Potash demand? The ever present story from various Potash CEO’s and market reports is Potash demand has been down due to the economy, forcing agricultural companies to use up all of their Potash inventories before outlaying increased expenditures to maintain inventory ratios. If indeed this is the case the Potash industry will be able to charge an increased price due to the inventory shortage.

Trading volume has increased due to the news. Option contracts have also benefited from the news, as many of the late 2010 and 2011 contracts have risen in price.

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