More competition could lower potash prices

Potash fertiliser prices could be about to fall if a recent move by one of the world’s biggest producers opens up market competition as expected.

Russian company Uralkali has pulled out of a marketing joint venture with Belarus firm Belaruskali, effectively breaking up one of two global cartels – the other in North America – that together accounted for about two-thirds of the potash market.

Uralkali said it could result in potash prices falling from $400 to $300/t, equivalent to £250-260/t on UK farms at current exchange rates. “Markets could well open up to more competition which should be good news for farmers in terms of lower prices, but I’m not sure they will come back to that extent,” AtlasFram crop inputs manager Andrew Merton said.

“There has been a slight knee-jerk reaction already with prices dropping from just above to just below £300/t on-farm, but nobody’s really moved yet and I don’t think we’ll see the full extent of any impact until the autumn.”
Andrew Merton, AtlasFram crop inputs manager

“There has been a slight knee-jerk reaction already with prices dropping from just above to just below £300/t on-farm, but nobody’s really moved yet and I don’t think we’ll see the full extent of any impact until the autumn.”

Some importers were looking to use stocks before cheaper material became available and Mr Merton said there was also talk that Uralkali may be considering a new trading arm with Belaruskali, which would influence any price impact. “It depends on what Uralkali do and how others react.”

Any significant price change was likely to come too late for those needing potash now, but there may be scope for savings in the spring, he added. “It’s probably best to sit tight and see where the market goes. If you can hold off buying potash until the spring, it may be worthwhile.”

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