Value Microcaps Food, Agriculture and Soft Commodities

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AAA.V Shortage of Potash

From SI:
“This isn’t a matter of price discussion. This is a matter of supply.”

Potash Cartel’s ‘Cupboard Is Bare’ for India After China Pact, Mosaic Says

Canpotex Ltd., the North American cartel of potash producers, has no spare supply to sell to India this quarter and won’t resume negotiations with Indian buyers until “late” in the period, Mosaic Co. (MOS) Chief Executive Officer Jim Prokopanko said.

Canpotex’s “cupboard is bare,” Prokopanko said yesterday in a telephone interview from Mosaic headquarters in Plymouth, Minnesota. “There’s nothing to talk about until we have a better assessment of what’s going to be available.”

Talks between Canpotex and Indian importers ended in late June when Canpotex agreed to deliver 630,000 metric tons to China in the second half, Prokopanko said.

The Indian Farmers Fertiliser Cooperative Ltd., a group representing 55 million farmers, said in May it would halt purchases of the crop nutrient unless Canpotex and other suppliers agreed to its conditions, including a 10 percent discount from the spot price. Canpotex is the marketing arm of North America’s three largest producers: Potash Corp. of Saskatchewan Inc., Mosaic and Agrium Inc. (AGU)

“Both the Indians and the Chinese understood -- we were perfectly clear -- that there would likely be enough tons only to serve one or the other of their requirements,” Prokopanko said. “This isn’t a matter of price discussion. This is a matter of supply.”

The producers of the form of potassium had expected negotiations with Indian importers and distributors to be completed by June, according to comments in April from Potash Corp. Chief Executive Officer Bill Doyle.
Indian Purchases

India bought 6.4 million metric tons of potash in the year ended March 31, according to the Fertiliser Association of India.

North American potash supply will remain tight because of steady demand and the effects of maintenance shutdowns and other supply disruptions as producers bring on line recent mine- capacity expansions, Prokopanko said in the interview.

Mosaic said yesterday in a statement its earnings in the three months through May rose to $1.45 a share from 89 cents a year earlier, topping the $1.39 average estimate of 18 analysts surveyed by Bloomberg. Fiscal fourth-quarter sales climbed 54 percent to $2.86 billion, beating the average estimate of $2.61 billion.

Mosaic advanced $1.21, or 1.8 percent, to $67.67 at 6:28 p.m. after the end of regular New York Stock Exchange trading yesterday. The shares dropped 13 percent this year through the close.

Potash helps plants to survive in dry conditions, strengthens their roots and curbs the growth of some crop diseases.

To contact the reporter on this story: Christopher Donville in Vancouver [e-mail].

http://www.bloomberg.com/news/2011-07-18/canpotex-s-potash-cupboard-is-bare-mosaic-s-prokopanko-says...