Fertilizer groups defied Thursday's slump in share prices after Russia's Uralkali bucked the sector trend by forcing through a 20% rise in potash prices.

The potash miner said Eurochem and Phosagro, two Russia-based makers of compound fertilizers, had, as of July 1, agreed to buy the nutrient at 4,750 roubles per tonne compared with 3,955 roubles a tonne previously.

Russian makers of compound fertilizers, typically blends of nitrogen, phosphate and potash, had resumed "full capacity operations", Uralkali added.

Market reaction

While the price remains way below 2008 levels, and Uralkali warned that global potash demand had "not yet recovered", the statement represents a rare fillip for the sector.

Last month, Germany's K+S and Canada's PotashCorp, the world's biggest fertilizer group, unveiled profits warnings and cuts to potash production, while US-based Terra Industries mothballed further nitrogen capacity.

Uralkali shares closed 0.5% higher at 103.53 roubles in Moscow on a poor day for global equities, which were undermined by weak US jobs data.

PotashCorp shares were 3.3% higher at Can$110.49 in Toronto at 16:30 GMT, with Mosaic shares 3.7% higher at $45.41 in New York. The Dow Jones industrial average was 2.1% lower.

K+S's 0.9% fall to E41.04 compared with a 3.8% drop in Frankfurt's Dax share index.

Revival forecast

The Uralkali deal comes two days after the group, in comments to its annual meeting, forecast that the potash market would be "one of the first markets to recover from the global downturn".

"We are confident that the fundamental  performance of the potash industry will remain competitive," it added.