The $2bn potash deal struck between North America's Canpotex export consortium and China, the biggest importer of the nutrient, is "positive for potash producers worldwide", UralSib analysts have said.

The broker said the concession by Sinofert, China's main fertilizer company, to sign up to a three-year supply agreement strengthened the hand of sellers, at a time when shorter deals, or even a move towards a more open market, are on the agenda.

China's reluctance to sign up to a previous deal, in February, amid tumbling fertilizer markets had raised doubts that even one-year deals, which had been the norm, would continue.

BHP Billiton, if its hostile $39bn bid for PotashCorp succeeds, has threatened to remove the group from Canpotex in favour of individual marketing deals, likely to drive down prices.

"The agreement ensures that the practice of long-term contracts between sellers and buyers will continue, which is supportive for potash export prices," Moscow-based UralSib said, terming the deal a "big plus" for Russian potash groups Silvinit and Uralkali.

Generous cap

Indeed, group noted that while the deal set caps on the amounts that Sinofert will have to pay for the 3m tonnes of potash it will receive from Canpotex in 2011-13, the ceilings allowed for a large increase in prices.

The limits implied maximum prices of $545 a tonne next year, rising to $695 a tonne in 2012 and $791 a tonne in the last year of the agreement, "significantly above" current prices of $350-400 a tonne.

UralSib, restating its "buy" ratings on Silvinit and Uralkali shares, added that the deal should be viewed as part of PotashCorp's efforts to defend itself from BHP, by improving its own outlook.

Separately, analyst Jing Feng at National Bank in Canada said that the deal "provides improved visibility" for PotashCorp and its fellow Canpotex members, Agrium and Mosaic.

It would act to a avoid a repeat of last year when, amid global economic downturn and weak crop prices, "China's potash imports fell sharply despite historical under-application".

Uralkali shares stood 0,2% lower at 141.80 roubles in afternoon trade in Moscow, with Silvinit stock down 0.4% at 21,175 roubles.