Supply concerns push global potash prices

Threat of mine going down puts potash supply on hold

By Dave Hannon -- Purchasing, 11/9/2007 1:59:00 PM

When one of the largest potash suppliers in the world said in late October it was concerned that a potash mine may go offline, several other potash suppliers held shipments and pushed price hikes to buyers.

According to Reuters, potash supply was already very tight before Russian miner Silvinit said in October a sinkhole at a mine put the operation at risk. That announcement led to other suppliers holding shipments and increasing prices. Potash Corp. of Saskatchewan issued a price increase of $50/short ton for January and February shipments.

"We are working with customers on their requirements for '08, and taking orders, we're just not pricing them (beyond February),” a Potash Corp. spokesperson said in an interview with Reuters. Potash Corp. reported a 67% incresase in profit in the third quarter on improved potash pricing.

Agrium Corp. of Canada also suspended shipments.

And Russian supplier Uralkali held shipments for 12 days before resuming them this week. And it’s exporting partner in Belarus increased prices on the Asian and Brazilian markets.

“I strongly believe in the fundamentals of the potash market long-term. Near-term, the risks are more on the downside, as share prices have gone so high," Yelena Sakhnova, director for industrial fertilizers and transportation at Deutsche Bank in Moscow told Reuters.