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Uralkali could discuss joint Swiss trading firm with Belarus

  • Although some analysts hold out hope that potash producers Uralkali and Belaruskali can settle their differences and reverse the damage from yesterday's breakup, Uralkali's CEO says it's not happening although he could consider joining with Belarus in a Swiss-based trading company.
  • He believes new global potash projects will be delayed, and sees global potash demand rising to 59M-60M tons in 2014 from 54M-55M tons in 2013.
  • Separately, Potash (POT -4.9%) confirms the Toronto Stock Exchange's approval of a previously announced ~43.35M share repurchase program.
  • MOS -2.8%, IPI -7.4%, AGU -2.1%, SQM -4.9%, CF -0.5%, RNF -1%, TNH -1.3%, UAN -0.4%.
Comments (2)
  • bberuch
    , contributor
    Comments (295) | Send Message
     
    I hold positions in MOS and IPI.
    POT feels it's shares to be undervalued after the impact of the Uralkai/Belaruskali breakup has had on it's share prices.
    Uralkali feels that Potash demand will increase next year and wants a bigger part of the pie so it may be jockeying for position with a new partner.
    If Uralkali is correct then this game playing will have created a situation where the stronger of the 9 impacted competitors shown in the article may well be currently offered at bargain prices.
    Any current holder should reevaluate the potential of his holding to determine if the share price reduction is an opportunity to stock average. or whether the long term effects will be negative and whether the panic selling was justified.
    THIS EVENT LOOKS TO ME LIKE A "BLOOD ON THE STREETS" senario.
    I for one have not liquidated any shares of MOS or IPI.
    1 Aug 2013, 06:11 AM Reply Like
  • sanvan
    , contributor
    Comments (20) | Send Message
     
    Global Potash and Phosphate players need to confront the last mile consumers i.e. Indian or Chinese or Brazilian farmers. Government subsidies play a big part in these countries and the whole game plan till now has been to cartelize to bargain hard for subsidies from consuming Governments who have no choice because raw materials exist only in certain parts of globe. However apart from disruption in cartels, another big change which cannot be ignored is that Indian or for that matter other governments are facing huge fiscal deficits, which is making farm subsidies unsustainable. This has led to rampant subsidy cuts in P&K and Potash holidays. The resultant high prices has led to demand destruction in favor of cheaper fertilizers. The longer term approach has to be to invest in last mile market connect with farmers whether through extension services, retail presence or investments in downstream and logistic facilities. Commodity players cannot solely remain raw material suppliers but have to invest in demand creation. Otherwise their shareholders run a high risk.
    1 Aug 2013, 08:48 AM Reply Like
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