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A view of waste heaps at the Belaruskali potash mine near the town of Soligorsk, some 130 km (81 miles) south of Minsk in this April 23, 2013 file photograph.
A view of waste heaps at the Belaruskali potash mine near the town of Soligorsk, some 130 km (81 miles) south of Minsk in this April 23, 2013 file photograph.
(VASILY FEDOSENKO/REUTERS)

Scott Barlow

Potash investors should have seen crash coming

Potash Corp. of Saskatchewan, Agrium Inc. and all global fertilizer stocks are going to get blasted today. The end of a Russian marketing cartel is the direct catalyst, but in truth, the pressure has been building on the sector for some time.

Early Tuesday morning, Bloomberg reported that Russia’s OAO Uralkali, the world’s largest potash producer, had abandoned a deal with the government of Belarus that was designed to limit production to preserve the commodity price. The news was interpreted as a sign of a price war in the fertilizer sector, setting the stage for OAO Uralkali to reduce inventories at the expense of everyone’s profitability.