potash pricing continues to uptrend

17/06/2011
It's certainly an interesting time in the world of potash. With wages (and inflation) in the BRIC nations (Brazil, Russia, India, China) on the rise, food prices rising globally (alongside other tangible commodities, particularly with the state of the currency markets at the moment), and a world in the sorriest nutritional state one could imagine (first and third world nations alike); there has never been a time when ecological, effective, and organic fertilizers were more necessary.
And in the case of Potash, the markets are bearing that up. The ongoing, and sure to be short-lived, Indian/Canpotex deadlocked negotiation has not negatively affected demand (which this year has exceeded even bullish industry expectations), or price, which continues to rise. Furthermore, the strength of demand from Brazil and Asia is such that there is presently no cause for concern on supply v demand.
K+S Kali, one of Europe's largest potash producers, and that continents market leader, announced that its price of granular muriate of potash (MOP) was raising by 10 euros, to 363 euro cif seaport (from 353 previously). Due to rapidly fluctuating exchange rates, dollar equivalent price changes almost hourly, but 363 euro is approximately 520-525$ this week.
K+S is also raising the price of their granular SOP, retaining their 90� price gap between MOP and SOP. Therefore, current prices for granular SOP are around 453 euro, or 650$. They are further applying the same price increase model to standard MOP and standard SOP contracts beginning Q3 of this year, to roughly 344 euro for MOP and 435 euro for SOP.
The new prices seem sure to be accepted by consumers (save, thus far, India). Particularly as Canadian Potash producers have made fresh sales to Asian consumers at the $510 cfr level for standard MOP, with shipment at $510 cfr and $525 cfr. Brazilian purchasing has been continuing at around the $525 cfr level for granular MOP, and a further price hike to $550-560 cfr depending on customer demand.
Posted by Byron Hawes