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.
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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.