URALKALI has dismantled the world’s largest potash cartel in a move that it expects to slash prices by 25 per cent, heralding a reshaped industry and pummelling shares of companies that produce the key fertiliser ingredient.
The break-up of the Belarus Potash Company (BPC), a joint venture with Belarussian partner Belaruskali, could cause a price war and leaves North America’s Canpotex as the dominant potash export venture.
It could also lead to cancellations of projects by rivals such as BHP Billiton as the industry weighs the effect of lower prices, but may feed through to better deals for farmers and ultimately consumers.
US-listed shares of the Canpotex owners – Potash Corp of Saskatchewan, Mosaic and Agrium – plummeted, cutting their market value by nearly $15bn (£9.8bn).
BPC and Canpotex had accounted for 70 per cent of global trade in potash.
City A.M. Reporter