North American potash producers got off to a flying start to 2013 for exports, offering support to industry hopes that a deal signed with China will spark a rash of demand from other importers.

Companies including Mosaic and PotashCorp exported 657,000 tonnes of potash last month, up 38% year on year.

The rise, which represented the first two successive months of rising exports since 2011, followed the signing late in December of a long-awaited supply contract between North American producers and China, the top importer, which delayed a new deal in a drive to secure lower prices.

Potash producers blamed China's stand-off for a demand slowdown which saw world potash shipments in 2012 fall well below initial expectations, and forced inventories held by North American producers above 3m tonnes as of the year of the year, 37% above average levels.

Many potash groups, such as US-based Intrepid Potash and  Canada's PotashCorp, have forecast better market prospects now the China deal has been sealed, with India, the second-ranked importer, also now having ended its own stand-off with exporters.

Strong domestic market

North American producers' potash stocks fell by nearly 40,000 tonnes in January, reducing to 29% their extra size, compared with average levels, and representing the first decline in four months, the data, from PotashCorp, showed.

Sales in the North American market were strong too, rising by 3% month-on-month to a level 67% above that in January 2012, and mirroring a trend seen in some other agricultural raw materials too.

Central bankers at the Federal Reserve's St Louis bank noted last week that "rising fertilizer and seed costs may have enticed some crop producers to pre-pay for 2013 inputs".

However, prices of potash itself, as measured at Vancouver, continued a gentle decline last month, the PotashCorp data showed.