MOSCOW, July 30 (Reuters) – Russia’s Uralkali has dismantled the world’s largest potash cartel in a move that it expects to slash prices by 25 percent, 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 as the industry weighs the effect of lower prices, but may feed through to better deals for farmers and ultimately consumers. U.S.-listed shares of the Canpotex owners – Potash Corp of Saskatchewan, Mosaic Co and Agrium Inc – plummetted, cutting their market value by nearly $15 billion.
BPC and Canpotex had accounted for 70 percent of global trade in potash, and the duopoly had set identical prices in key markets such as China and India.
“In the last few years, BPC and Canpotex … succeeded by raising potash prices much above their production cost,” a senior official at a major Indian potash firm said, asking not to be identified because of the sensitivity of the matter.