Monday, August 31st15.6°C
27271

Uncertainty hangs over potash market, but fundamentals should be supportive: TD

TORONTO - A cloud of uncertainty is hanging over the global potash industry, but demand from developing countries is expected to grow in line with historical trends, a report by TD Bank says.

Potash prices crashed last year after Russian potash company Uralkali said it would no longer export with Belarusian Potash Co., a joint venture with Belarus-based Belaruskali.

TD expects international potash prices to average close to their current level of US$305 to US$320 per tonne over the next two years, but said they will be volatile.

"This forecast is in line with medium-term supply demand fundamentals including the transition to more balanced diets, urbanization and a push to increase crop yields due to less arable land," TD economist Sonya Gulati said.

Belarusian Potash Co. supplied about 42 per cent of the world's potash exports before it broke up and sent prices to a four-year low as major buyers like China and India waited to see how far prices would fall.

Potash Corp. of Saskatchewan (TSX:POT) cut about 18 per cent of its workforce late last year in response to the soft demand.

However China has started to sign potash contacts in recent weeks with a deal with Uralkali and another with Canpotex — the Canadian export partnership that includes PotashCorp, Agrium and Mosaic — at around US$305 per tonne, effectively establishing a price floor.

"Buyers like China for instance were waiting to see how low prices were going to go and the fact that they actually signed those contracts was indicative of the fact that they still had demand," Gulati said.

She noted that uncertainty will persist in the short term.

Prices may be pushed up if there's a reconciliation between Uralkali and Belaruskali, production falls or demand rises more than expected. On the down side, potash buyers could continue to wait in hopes pushing prices lower or producers could add more capacity than anticipated, weighing on prices.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX13859.12-5.95
S&P CDNX559.48+3.49
DJIA16528.03-114.98
Nasdaq4776.51-51.82
S&P 5001972.18-16.69
CDN Dollar0.7615+0.0002
Gold1140.10+8.50
Oil47.41-1.79
Lumber233.00-1.20
Natural Gas2.684-0.005

 
Okanagan Companies
Pacific Safety0.185+0.020
Knighthawk0.010.00
QHR Technologies Inc1.23-0.06
Cantex0.04-0.01
Anavex Life Sciences1.35+0.01
Metalex Ventures0.05-0.00
Russel Metals22.11+0.70
Copper Mountain Mining0.63-0.01
Colorado Resources0.075-0.005
ReliaBrand Inc0.0045+0.0005
Sunrise Resources Ltd0.02-0.01
Mission Ready Services0.085+0.015
Decisive Dividend Corp2.75+0.14

 





FEATURED Property
2393446#114 1075 Bernard Avenue
3 bedrooms 2 baths
$189,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Agree to ask questions

Photo: Thinkstock.comThe STORY: I think, said Janet to herself, that I just figured out a solution to my problem of letting the prospect run the meeting.With that thought in mind, she got out of her c...


Your business is not a bank

Photo: Thinkstock.comYour plumbing business is not a bank. But when you are giving terms to customers that exceed what you get from your suppliers, you become one. And every time that someone does not...


Begin with the end in mind

Photo: ContributedWe humans love our dates: birthdays, anniversaries, 9/11, the Ides of March - our lives are intimately woven within the tapestry of the calendar. So it should come as no surprise whe...

_








Member of BC Press Council


26916