The potash market has begun to "gain traction" since China agreed its long-awaited import deal, fertilizer giant Mosaic has said, noting improved farmer demand.

Jim Prokopanko, the Mosaic chief executive, said he was "confident [that] potash demand will emerge" after last year's slump in orders, blamed on tight credit and lower crop prices, which was billed by some analysts as the worst in 20 years.

China's agreement to buy potash from Belorussia and Russia at $350 a tonne, including freight, had resolved uncertainty about how low prices might go. China, as the world's largest potash importer, typically gets lower rates than other buyerrs.

"The potash market… is beginning to gain traction with the recent settlement of contracts in China which has afforded the marketplace price discovery," Mosaic said.

The group, which is 64% owned by grain giant Cargill, also flagged "recent increased potash application rates in the Americas, driven by nutrient-depleted soils".

Forecast failure 

A trend of rising sales which emerged over the autumn was set to continue into 2010, Mr Prokopanko said.

However, the group's failure to put a figure on forecast potash sales "until market conditions normalise" disappointed some investors.

Some observers also pointed out that Mosaic is a member of the Canpotex consortium, which is believed to be in talks with China over a follow-up deal to that agreed with the Belorussian Potash Company.

"Historically, Canpotex has followed with an agreement with China almost immediately (within a week or so) after a BPC-China settlement," Research Capital said.

"So this marks the first time that Canpotex has failed to follow suit with an agreement shortly after a BPC-China agreement."

Revenues slide 

Mosaic's comments came as the group unveiled revenues of $1.71bn for the September-to-November quarter, down 43% year on year.

The decline was led by lower sales of potash, which slumped 57% to $414.3m, with revenues from phosphate, Mosaic's main product, sliding 34% to $1.33bn.

Earnings dropped to $107.8m from $959.9m a year before, when they were boosted by asset sales.

Per share, underlying earnings came in at $0.32, below the $0.35 expected by Wall Street analysts.

Mosaic shares closed up  3.8% at $65.57 in New York