Canada-based potash giant Brazil Potash Corp. (GRO.US) saw its shares surge more than 45% in after-hours trading on Wednesday after the company announced it has reached a binding major agreement with Keytrade Fertilizantes Brasil for a 10-year "take-or-pay" commitment. Under this agreement, Keytrade will purchase up to approximately 900,000 tons of potash products annually, finalizing the memorandum of understanding announced in January this year.
Keytrade Fertilizantes Brasil, one of the world's leading fertilizer trading companies, will purchase approximately 30%-37% of Brazil Potash Corp.'s annual potash production from the company's Autazes project through this take-or-pay agreement, capped at 900,000 tons per year.
Brazil Potash Corp. stated that it has now secured binding offtake agreements covering approximately 60% of its planned production and is in advanced negotiations with a potential major partner. If completed, this would bring the company's total contracted volume to approximately 91% of its annual capacity.
"This significant agreement with Keytrade represents an important milestone in Brazil Potash Corp.'s global commercialization process," said CEO Matt Simpson. He added in the statement that the company now has approximately 1.45 million tons of binding commitments against a planned annual production of up to approximately 2.4 million tons at the high end.
According to public information, Canadian potash leader Brazil Potash Corp.'s main business involves developing, constructing, and operating the Autazes potash (potassium chloride, KCl) project in Brazil's Amazon state, supplying potash to Brazil's agricultural market. The company positions itself as a "potash fertilizer company." The parent company is registered and headquartered in Toronto, Canada, and operates assets in Brazil through its subsidiary Potássio do Brasil Ltda.
The trend chart for Brazilian potassium chloride CFR prices (CFR Brazil, granular potassium chloride/MOP) shows that the average price in Q1 2025 was approximately $319 per ton, while Q2 averaged about $359 per ton, representing a quarter-over-quarter increase of 12.6%. The July monthly average was approximately $362.5 per ton, compared to the full-year 2024 average of $295.1 per ton, achieving a price increase of 22.8%, demonstrating the recovery brought by improved potash demand and tightened supply in 2025.
Potash prices reached historical highs in 2022 due to unprecedented sanctions imposed by Western countries on Russia and Belarus, which led to supply constraints and logistics disruptions. Entering 2025, improved fertilizer usage in North America and Brazil, better weather conditions, crop rotation leading to increased potassium supplementation needs, and major companies raising sales guidance have driven a moderate recovery in benchmark potash prices.
Overall, post-Russia-Ukraine war supply rebalancing, demand recovery (North America/Brazil), and long-term contract anchoring have jointly driven this year's moderate rebound. However, potash price levels have returned to normal ranges from the extreme highs of 2022.