Global fertilizer prices are headed for about a 25 percent slide after a Russian potash cartel fell apart, removing price supports, published reports said.
Uralkali OAO (LON:URALL), a Russian-based company, ended a joint venture with Belaruskali, a Belarus company, which controlled around 43 percent of the global potash market. The result, said Vladislav Baumgertner, Uralkali’s chief executive, was that prices would fall from $400 a ton to about $300 in the second half of the year.
The venture ended as Uralkali accused its Belarus partner of selling fertilizer outside the marketing agreement, according to a report in The Telegraph newspaper.
Eastern European countries also may slash prices in order to take advantage of the market, reports said.
North American potash producers through a cartel control 70 percent of the world’s market and now may have to cut prices further to compete on the global market.
Uralkali shares fell by 25 percent on Tuesday and North American potash companies like Potash Corp./Saskatchewan (USA) (NYSE:POT), Agrium Inc. (USA) (NYSE:AGU) and Mosaic Co (NYSE:MOS) all fell sharply.