Data showing a continuing rise in potash stocks has taken some of the heat out of the sector following a report of a potential $25bn approach for US fertilizer giant Mosaic.

Potash inventories held by North American producers grew in June to about 3.6m tonnes, more than twice the five-year average, data from Canada's PotashCorp show.

The increase, the 10^th successive monthly rise, will fuel concerns over fertilizer groups' ability to maintain prices in the face of a buyers' strike by North American and European farmers.

It was revealed last week that Russia's Silvinit agreed to sell potash to India at $460 a tonne, below the $700 a tonne or so that other producers have been holding out for in other markets.

Mosaic bid?

The PotashCorp data followed a report in the Estado de Sao Paulo newspaper that Vale, the Brazilian mining group, was preparing a bid for Mosaic, one of the world's biggest producers of phosphate and potash fertilizers.

The report, which Vale has refused to comment on, sent shares in North American potash groups soaring on Thursday.

However, the sector was mixed on Friday. While Mosaic had, at 17:00 GMT, added 5.3% to its 12.2% gains in the last session - reaching $52.63 - Canada's PotashCorp was up 1.1% at Can$103.47 in Toronto.

Domestic rival Agrium stood 2.2% up at Can$46.12.

Across the Atlantic, Germany's K+S ended 2.7% lower at E37.84 in Frankfurt while Uralkali closed up 1.1% at 99.03 roubles.

The lack of European reaction was in part down to Western Europe's small potash reserves, while Russian groups – which do have rich reserves – look unlikely bid targets, an analyst told Agrimoney.com.

"Canada is where the action is on this score," the analyst said.

"Brazil needs potash, Canada has got potash, and taking over and running its companies is a relatively easy affair."

Vale has already spent $850m this year on Argentina and Canadian potash assets.

However, success in a Mosaic bid will depend on Cargill, the US grains giant which owns a 64% stake in the fertilizer group.