China gets stake in Uralkali to secure potash supply, could weaken Canpotex

|About: Uralkali Jsc 144 A (URALL)|By:, SA News Editor

Potash stocks are lower after China acquired a 12.5% stake in Russian potash producer Uralkali (URALL.PK -1.4%), a deal that could put new pressure on prices and reduce the chances of the Russia-Belarus cartel being revived.

The deal could strengthen China's position in negotiations with other producers; China imports ~6M metric tons/year of potash, more than 10% of global demand, and the Chinese potash price is considered the global benchmark.

The deal also could give Uralkali an upper hand in selling potash in the Chinese market ahead of Canpotex, the North American potash cartel owned by Potash (POT -1.4%), Mosaic (MOS -1.4%) and Agrium (AGU -0.8%).

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