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Last summer, Russian potash giant OAO Uralkali predicted that its plan to collapse a cartel-like entity would allow it to seize market share from rivals, including those in Canada. It appears the company was right.
On Thursday, the company said its potash sales volumes in the third quarter were 2.6 million tonnes, essentially in line with last year’s figure, while export volumes rose 11%. That is a solid result, because it comes amid a period of extreme volatility and uncertain demand in the potash market. Both Potash Corp. of Saskatchewan Inc. and Agrium Inc. reported year-over-year sales volume declines of more than 20% in Q3, despite falling prices.
Uralkali said its new strategy is progressing “very satisfactorily.” “They did gain share in Q3,” said Joel Jackson, an analyst at BMO Capital Markets.
Historically, potash companies made money by withholding production to keep the market in balance and maintain their pricing power. But Uralkali, the world’s biggest producer, threw that plan out the window when it shut down its cartel-like marketing partnership with Belaruskali last July and vowed to boost production.