The impact of the eurozone debt crisis in tightening credit conditions has made Europe the weak link of the potash trade, with its market, unlike those of many developing countries, to stagnate.

European potash sales are being dented by concerns that lending to farmers will suffer from banks' moves to tighter borrowing constraints, to preserve capital in the face of the crisis, fertilizer giant Uralkali said.

"The uncertain economic situation in Europe impacts buyers' activity," Uralkali said,

"There is a concern that farmers might encounter certain difficulties securing credit facilities for business development."

'Capital a lot tighter' 

The comments follow a report from Agrimoney.com a week ago that tougher lending practices had been noted in the oilseeds trade, besides other commodity sectors.

Earlier this week, Ukraine farm operator Ukrzernoprom Agro revealed it had turned to an, unnamed, "major international grain trader" for a $1m commodity loan, to pay for seed.

However, many traders themselves are finding loans hard to come by – at a time when crop prices still high by historical standards have inflated their need for cash to fund deals and inventories.

"Prices are a lot higher, meaning the capital that needs to be financed is a lot larger," a London bank source said.

But capital "is getting a lot tighter, especially in the last three months", the source added, noting that European banks, at greatest risk from eurozone instability, were "key players in trade finance".

'Robust potash demand'

In Europe's potash market, sales "will remain at the current level until the uncertain European economic situation is resolved", Russia-based Uralkali said.

The stagnation contrasts with conditions in other markets, with record farm profits to "support fertilizer application during the spring sowing season".

And in emerging markets, potash consumption had soared this year, reaching a record in South East Asia despite an August rise in export prices from the former Soviet Union to $535 a tonne.

"Healthy farmers' returns supported robust potash demand growth in all countries of the region," Uralkali said.

In China, consumption was set to exceed 10m tonnes, including at least 6m tonnes of imported product, with Latin American use to "reach about" 10m tonnes.

Hopes for 2012 

The figures - which came as Uralkali unveiled revenues of $1.2bn for the July-to-September quarter, and production of 2.9m tonnes of potash - tally with those in a separate report from PotashCorp, which forecast more growth to come in trade with emerging markets.

"With its limited ability to expand internal potash production capability and its significant nutrient requirements… China will import more potash in 2012 primarily driven by supportive fruit and vegetable prices as well as higher prices for key grains," PotashCorp, based in Canada, said,

In Latin America, "replanting of older sugar cane, increased acreage of this crop and a strong Safrinha corn planting season" early in 2012 "should support" demand.

Uralkali depositary receipts, a proxy for shares, closed down 1.9% at $35.80 in London.