Potash production remains stagnant as Potash Corp and Uralkali cull output in response to low farmer purchasing. However, short-term prospects look slightly positive as producers are certain global demand will pick up.
Recently, record-setting earnings have been the norm for fertilizer producers, however, late last month the markets were roiled by a quarterly earnings report by Mosaic, the world’s largest phosphate producer, which showed that profits missed analyst’s earnings per share (EPS) expectations.
Legislation passed on Thursday by the Canadian Federal Government will dissolve the Canadian Wheat Board.
A class action suit alleging price fixing by the world’s top potash producers: Potash Corporation of Saskatchewan, Mosaic and Agrium Silvinit (now merged with Uralkali) , IPC, and Belaruskali has been tossed out by a federal appeals court.
Kazakhstan has long been known to contain potash reserves; however, no mine has been developed. Preliminary estimates suggest that the country, which is favourably located in close proximity to the Asian markets, may hold enough potash reserves to make it one of the world’s top producers.
Despite debt burdens and weak macroeconomics that threaten to derail the global economic recovery; the potash and phosphate markets are positioned to post a strong fourth quarter.
Knowing very well that economic troubles may lie ahead, executives of major fertilizer companies have stood firm in claiming that their industry is well-positioned to withstand a bumpy ride, and claim that it will take a “severe and prolonged” global recession to crimp fertilizer demand.
Rumours are spreading that a state-owned Chinese company may come forward with a purchase offer for Belarus’ prized asset, potash miner Belaruskali.
Despite weeks of negotiations, India has yet to reach a potash supply agreement with major potash suppliers, including Canpotex, and is holding out for a lower price in order to bridge the gap between the international price of potash and the benchmark import parity price fixed by the government.
Virtually every agricultural commodity price on a steep upward trend, however, PotashCorp's Wayne Brownlee expects less volatility in potash prices.
Thursday, February 2, 2012