Strong World Fertilizer Demand in 2005

TORONTO - Jan 27/05 - SNS -- Low world grain stock levels despite record production in 2004-05 points make it clear the world's farmers will continue to be challenged to meet the world's growing food and feed needs, says the Potash Corporation of Saskatchewan Inc. (PotashCorp).

The net result is there is a positive outlook for potash, phosphate and nitrogen. This has caused Canpotex to forecast record sales this year, including a forecast sales to China will top 8.7 million metric tons (MT). Sinochem, a purchasing agent for China, signed a 2005 contract with Canpotex for a minimum 17% increase in volumes with a $40 MT increase in price.

"Since China purchases its own freight, this increase in price will directly impact our realized prices," PotashCorp said. "Ocean freight is expected to remain volatile in 2005 and continue at historically high levels. To mitigate this risk, Canpotex anticipates that it will lock in freight rates for over half of its delivered sales."

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