By Leia Michele Toovey- Exclusive to Potash Investing News

Potash Corp shares rose 3 per cent to $85.99 on the Toronto Stock Exchange on Thursday after the company said it earned more in the third quarter than it did in all of 2007, its record year.

Profits climbed five-fold to $1.24 billion, or $3.93  per share, up from $243.1 million, or 75 cents, a year earlier. Analysts had expected a profit of $3.52 a share. Potash shares peaked in June as concerns about shrinking world grain stocks boosted demand for fertilizer, and prices for nutrients soared because of supply shortages.

The shares upswing was dented when investors lost confidence in global fertilizer demand.  Due to the current economic crisis, investors soured on potash believing that farmers would curb fertilizer use. This sent Potash Corp’s shares down 65 percent. Currently, analysts say Potash Corp’s shares are undervalued, as economic fear rather than true fundamentals are driving the price. As the world’s largest fertilizer company, if inventories begin to climb the company will curb output.  This will work to stabilize prices.

Potash sales have slowed recently as farmers in the United States and Brazil held off from buying fertilizer. However, when the spring planting is on the horizon potash demand is likely to rebound.

 An 11-week strike at three of Potash Corp’s mines has already curbed output. However, Potash Corp announced this week that they signed tentative agreements to end the strike. About 500 members of the United Steelworkers union employed at the Allan, Cory and Patience Lake potash mines will vote on the agreements on Nov. 13. The potential end to the strike comes as fertilizer stockpiles controlled by Potash Corp. and other Canadian producers are near the lowest levels on record, according to the Fertilizer Institute. The three mines involved in the strike accounted for about 30 percent of Potash Corp.’s total output of the nutrient last year. The workers walked off the job August 7 at the Saskatchewan mines to back demands for a new contract that included a greater share of the company’s rising profits from selling fertilizers.

German fertilizer supplier K+S  toned down its 2008 sales outlook to reflect the more cautious earnings forecast it issued last month but added that a rebound in fertilizer demand could be in the offing next year. The world’s fourth-largest potash miner expects group sales to increase in 2009, banking on a rebound in grain prices because the current slump lacked a fundamental explanation. Third-quarter operating profit jumped more than six-fold, better than expected. Quarterly earnings before interest and taxes and excluding swings in currency hedging instruments jumped to US$640 million.

Global consumption of Industrial & Caustic Potash totaled an estimated 28.32 million tonnes in 2007. Asia-Pacific represented the largest market in terms of consumption for the year 2008, accounting for an estimated 31.8 per cent of global consumption volume. The region is also poised to post the fastest growth rate in terms of consumption over the years 2001 through 2010. Fertilizers represent the largest end-use segment for Industrial & Caustic potash worldwide, with consumption estimated at 25.12 million tons in 2008. Pricing of potash in the international markets is highly dependant on the demand for fertilizers, as fertilizers account for a lion’s share of potash usage. The growing agricultural acreage in the recent past has resulted in very high utilization of capacity and strong prices. China and India are among the largest consumers of potash in the world. A large portion of potash in these regions is imported. Owing to the high demand in these regions, potash prices have stayed firm in the global market.

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