The amazing ever upward movement in the potash market just continues.... just last week we had the $625 price area breached, first with the Russians [Mar 26: Russia-India Deal Boosts Potash Price Forecasts], then the North American cartel [Mar 27: Canpotex Potash Contracts Secured with India @ $625], and now a whole week later we are already discussing the $750 range. Amazing.
Now keep in mind we cannot directly compare prices in India with China, as the Indian price includes shipping (which is roughly $125/kg in today's era), so effectively it is $500 for the product, $625 to $750, stripping out the $125 shipping in both scenarios, is still a massive increase. And this is why, once people overreact one way or the other to Mosaic's (MOS) report Friday, I'll be looking to quickly scale back in. Granted we will have more major overreaction in a few week's to Potash (POT) earnings (my god the sky is falling! input prices going up! whine! cringe! weep!), but as I've said in my piece - these input costs are being passed right along to the end customers.
But you can't discuss this with a panicked herd, so I am going to remain cautious until I see the Friday reaction. But the fundamentals remain... scratch that... get better by the month. Now we just have to wait to see how the herd of sheep react... and then keep on trucking on this amazing secular growth story.
- The huge price jump for potash exports to India is a sign of things to come for China and other buyers for the rest of 2008, the chief executive of Russia's Uralkali, one of the world's biggest potash producers, said on Wednesday.
- Vladislav Baumgertner told a BMO Capital Markets fertilizer conference that spot market prices quickly
