Grains Oilseeds

[KastelCo]

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Potash suppliers fully booked without China purchases

Reuters, Wednesday April 9 2008

* Global grain price surge due to structural changes
* Potash suppliers fully booked without China purchases
* ICL seeks new acquisitions

The surge in global grain prices and subsequent jump in fertiliser prices reflect structural changes in the market rather than a bubble, Israel Chemicals Chief Executive Akiva Mozes said.

The boom in grains is fueled by enhanced standard of living in developing countries such as China and India, which has boosted food consumption.
"We don't believe this will go back. This is a structural change," said Mozes.
Other structural changes are a boost in consumption of grains for animal feed as wealthier people in these countries consume more meat, as well as increased use of biofuels.
"We could say the market is very tight, there is not enough fertiliser to meet demand so the prices for fertilisers will keep going up," Mozes said. "We need to see a change in the supply curve to cope with growth in demand."
Israel's second-biggest company listed on the Tel Aviv Stock Exchange with a market value of $20.7 billion, ICL has benefitted tremendously from higher demand and prices for its potash and phosphate fertilisers.
Its sales reached a record $4.1 billion in 2007 and net profit jumped to a record $535.6 million while its share price doubled in the past year.
INDIA CONTRACT
ICL, which produces about 10 percent of the world's potash, benefits from exclusive concessions to extract minerals from Israel's Dead Sea. It also mines phosphate rock in the Negev Desert and potash and salt from mines in Spain and the UK.