Having read the whole BBY note I have some initial reservations...

Having read the whole BBY note I have some initial reservations and perhaps the analyst needs to spend more time thinking about the sector dynamics and connecting the dots.

I'm a bit surprised he hasn't drawn any kind of distinction between the vastly different players or would-be players he summarises at the end of the note. It would have been helpful to see a table of comparison with the players side by side. He's also neglected to include Potash Corp despite quoting them as a source!

I question his long term price forecast for phosphate rock as it doesn't fit logically with other research cited in his note.

Supplies of high grade P205 are running out. For that reason mines like Lady Annie, Al-Jalamid are now economic because dwindling supply has increased prices making it economic to mine lower grade rock providing the economies of scale and logistics stack up. (the latest on Al-Jalamid is that it is looking like being delayed even further, into 2012)

If over time, mining for increasingly lower grade phosphate rock becomes inevitable via exhausting high grade deposits (and assuming massive new high grade deposits are not discovered) then it can only happen and at increasingly greater extraction expense.

Therefore mining can only be economic for the miner if the sale price of the rock ensures acceptable profits hence whilst still profitable, the 2014 price looks way to low to me.

There are no substitutes for phosphorous therefore normal substitution theory doesn't work here and prices can't be driven down via that way so the steep price decline from 2010 to 2014 doesn't stack up to me. This issue with fertilizer shortages has taken a long time to build up so I can't credit a forecast showing it solved by 2014.

He may have assumed that all prospective producers are in full production from 2012 and flooding the market with supply hence driving the price down but that's not how I think it actually works.

Happy to hear any views to the contrary if I have missed something here :-)