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Potash inventories lowest ever in August-analyst
Tue Sep 16, 2008 2:41pm EDT

http://www.reuters.com/article/marketsNews/idCAN1644771420080916?rpc=44

WINNIPEG, Manitoba, Sept 16 (Reuters) - North American
potash producers were left with a record low inventory of
825,000 tonnes of the fertilizer at the end of August, an RBC
Capital Markets analyst said on Tuesday.

The month-end inventory was down 21 percent from the end of
July and 33 percent below last year's level, said Fai Lee in a
research note, quoting industry data.

"Given tight potash supply conditions and strong
agricultural fundamentals, we expect potash prices to remain at
elevated levels," Lee wrote.

Prices for potash basis Vancouver approached $800 per tonne
at the end of August, according to Fertecon Ltd data posted on
the website of Potash Corp of Saskatchewan (POT.TO: Quote, Profile, Research, Stock Buzz), the
largest producer of the mineral.

A year ago, potash spot prices were under $200 a tonne.

Record prices for grain have spurred fertilizer sales as
farmers try to maximize yields, and miners of potash have not
been able to keep up with demand.

The inventory data is collected for subscribers by the
Fertilizer Institute. Potash Corp posted a summary graph on its
website showing inventories were down 40 percent from the
five-year average.

"The latest inventory data is consistent with industry
reports that recent visitors to the Port of Vancouver have
indicated the potash warehouses were 'effectively empty'," Lee
wrote.

Canadian producers jointly export potash to offshore
markets through Canpotex, owned by Potash Corp, Mosaic Co
(MOS.N: Quote, Profile, Research, Stock Buzz) and Agrium Inc (AGU.TO: Quote, Profile, Research, Stock Buzz).

The Belarussian Potash Company, Canpotex's biggest
competitor, is also reported to have little inventory in its
warehouses, Lee said.

Potash Corp shares were up 1.5 percent to C$166.41 on the
Toronto Stock Exchange on Tuesday, while Agrium was down 25
Canadian cents at C$78.39 in Toronto, and Mosaic was down 85
cents percent at $83.35 in New York.

LINK:
here
($1=$1.07 Canadian)
(Reporting by Roberta Rampton; Editing by Peter Galloway)