Analysing the world potash industry

Commentators have usually viewed potash as a rather unglamorous commodity because of its limited applications, low prices, the relatively small size of the industry, a persistent supply overhang situation and high barriers to entry. Yet on closer inspection, potash provides an interesting mineral market case study. Recently the industry has been operated as a cartel coordinated by two exporting companies Canpotex in North America (owned by PotashCorp, Agrium and Mosaic) and the Belarusian Potash Company in the Former Soviet Union (owned by Uralkali and Belaruskali). The sector attracted new interest after 2007 when world potash prices more than doubled and the prospect of more rapidly growing demand emerged as oil and gas prices surged. Two notable recent developments have been the unsuccessful effort by BHP Billiton to acquire PotashCorp in 2010, and the attempt by Uralkali in late 2013 to increase its market share by withdrawing from its marketing agreement with Belruskali, which now seems to have been thwarted. Considering the demand and supply sides of the industry, the current paper reflects on its recent evolution and assesses likely developments in the coming decades. (c) 2014 Elsevier Ltd. All rights reserved.