The pricing mechanism of potash fertilizer mainly refers to the annual long-term contract price obtained by Canadian Canpotex and Belarusian Potash Company (BPC), the most important of which is the contract price of China, the largest import customer. The import of potash fertilizer in China is monopolized by Sinochem and Zhongnong Group, and Sinochem and Zhongnong negotiate with Canpotex and BPC every year to determine the FOB of the long-term contract for that year. When determining the price of a long-term contract, we often refer to the price of the past few years, and usually we can maintain a certain price for one year or even several years. Therefore, it is relatively stable, reflecting the typical price stickiness characteristics in oligopoly. As the largest consumer country, China's unified signing of long-term contracts has also increased this price stickiness.
Taking 2008 as an example, after signing long-term contracts with customers in India, Southeast Asia and Brazil, the two giants announced on April 6 16 that they had reached a long-term agreement with Sinochem Group and China Agricultural Group, and delivered goods to Sinochem and China Agricultural Group within six months from June to February, with each ton of Canpotex and BPC1000,000, with a FOB ratio per ton. Subsequently, the contract price between China and ICL and APC also increased by 400 dollars compared with 2007, and the international potash giant has actually formed the price alliance.