By Yuliya Fedorinova July 30 (Bloomberg) -- OAO Uralkali, the...

By Yuliya Fedorinova
July 30 (Bloomberg) -- OAO Uralkali, the world's larges potash producer, upended the $20 billion-a-year industry by abandoning limits on production that underpinned prices and
halting cooperation with Belarus that controlled supplies from the former Soviet Union.
The decision sent shares of potash producers plunging as much as 27 percent from Israel to Germany to Canada and the U.S. as investors speculated a flood of supplies will lead to lower prices for potash, a soil nutrient that strengthens plant roots. Uralkali, part-owned by billionaire Suleiman Kerimov, said it exited the venture after Belarus undermined the sales agreements.
"Uralkali's announcement completely turns the global
potash market upside down," Elena Sakhnova, a VTB Capital
analyst in Moscow, said by phone. "If previously global potash producers were acting like an oligopoly, working with the rule that benefited higher potash prices over shipped volumes, now the market will be fully competitive."
Uralkali's venture and a group comprising Potash Corp. of Saskatchewan Inc., Mosaic Co. and Agrium Inc. played off each other, moderating output and exports along with demand to prevent price swings.
Uralkali shares fell 19 percent to 151.92 rubles in Moscow, the biggest drop since November 2008. Trading was suspended for a half hour after shares crossed the 20 percent threshold.