By Leia Michele Toovey- Exclusive to Potash Investing News ^[1]

^[2]Potash miners have been accused of collusion; due to the fact that the big market players have formed a "silent agreement" in which they swiftly and jointly cut output to stabilize prices. This strategy has been met with mixed opinions.  The companies say they are simply trying to stabilize their industry; as violent swings in commodity prices can be dire for a company's success.  This we are all more aware of in the current economic climate.  However, some think that these potash miners are playing a dirty game.  By keeping prices high these potash miners have the chance to maintain profits despite the fact that values of many crops, soybean ^[3] and corn as an example, have fallen off a cliff. Which of the assumptions is more accurate?  For now that is up to the courts to decide.  Since September six federal lawsuits have been launched involving eight key market players.

Price fixing?  A silent agreement?  Well, if this is true than Belarusian Potash Corp just broke a pact with its market allies. The Eastern European export collective has made a concession to Brazil in the form of a 25 per cent price reduction. Other potash giants can't be too pleased with this precedent. Potash Corp and Agrium are reportedly in negotiations with China to nail down the annual rate at which Potash will be bought. Unlike Brazil, which is a spot market, Chinese buyers agree to an annual rate. China may very well use Belarusian's moves as a bargaining chip in their favour.  If Potash and Agrium have no choice but to sell the potash at a lower rate; they will be locked into this rate for the duration of the year. A bitter pill to swallow when considering a rebound is expected to start in Q2-Q3.

Mining giant BHP may be looking to cash in on a relatively strong potash market. BHP Billiton wants to build a potash mine near Jansen, about 140 kilometers east of Saskatoon. It would produce eight million tonnes a year, making it the world's largest mine. To put this amount into perspective, all of Potash Corp's mines together produce about nine million tonnes a year. A project proposal has been filed with the provincial government, and if everything gets approval, construction could begin in the summer of 2011 with production beginning in 2015.

CIBC world markets is urging its clients to dump Agrium shares and load up on Potash Corp in an attempt to undermine Agrium's $3.6-billion bid for rival CF Holdings. The brokerage house advocated dropping Agrium and buying Potash shares to clients who want exposure to fertilizer stocks, which are favoured holdings in bear markets. A mass flux of funds invested out of Agrium, and into Potash Corp would undermine Agrium's stock price, and in turn, knock back the value of its hostile cash-and-shares offer for CF.

Earlier in the week, CF launched an unsolicited bid for Terra Industries, and Iowa based nitrogen maker. Terra voiced an out of hand rejection to the bid. On January 22, Potash one and Potash north announced a business combination ^[4].  Merger and acquisition activity in the potash industry had been few and far in between since the economic collapse; in contrast to the flurry of mergers, acquisitions and joint ventures in other commodities ^[5].  Analysts claim that these events may signal the start of a consolidation phase in potash, arguable the most exclusive product in mass mining, and one increasingly under attraction from the biggest names in the business. The Agrium bid for CF Industries is at a premium, for $3.6 billion, of which some $1.5 billion would be by way of cash, reflecting the relatively robust shape of the global fertilizer sector.