Belarus potash fetches record price

MINSK, July 16 (Reuters) - Belarussian Potash Company, the world's biggest exporter of the mined fertiliser, said on Wednesday it had clinched a 40,000-tonne deal with Sri Lanka at a record price of $1,050 per tonne.

"The company marked a success this month by winning a tender to sell potash to Sri Lanka at a record level for production of Belarussian and Russian potash plants in the region," the company said in a statement.

The firm also announced it had concluded two 30,000-tonne contacts to Bangladesh and the United States, with supplies to begin in August.

The Belarussian Potash Co is a 50-50 joint venture between Belaruskali and Russian miner Uralkali (URKA.MM: Quote, Profile, Research). It also acts as export agent for London-traded Uralkali (URKAq.L: Quote, Profile, Research).

The company said in May it expected no further price rises in 2008 after levels nearly doubled in the first few months of the year, but it made that prediction contingent on an absence of sharp oil price rises.

In its latest statement, it said demand for potash was rising and consequently prices for potash were expected to be maintained over the next few years.

"The main factors are growth in world agricultural markets, population growth and an improvement in living standards."

ING analyst Alexandra Melnikova in Moscow said prospects for the market in the short-term were excellent, predicting an average price for next year of $1,200 per tonne.

"We are more concerned about longer-term performance, when in 2011-2012 supply from green fields could disrupt market fundamentals. We have our long-term potash price on the $500 level," she said.

The company says it accounts for 33 percent of potash exports worldwide and shipped 12 million tonnes to buyers in 45 countries last year. (Reporting by Andrei Makhovsky, writing by Ron Popeski)