Mosaic CEO says Uralkali potash plan fails 'economic sniff test'

decrease font size  Resize text   increase font size       Printer-friendly version of this article Printer-friendly version of this article

Uralkali's revamped potash marketing plan, focusing on maximizing sales volume rather than price, fails the "economic sniff test," Mosaic Co Jim Prokopanko said on Tuesday.

Prices of the crop nutrient have slipped since midsummer, when the biggest global producer, Russia's Uralkali OAO , quit its export partnership with Belaruskali and said it would seek to maximize sales volumes.

Prokopanko, responding to a question at the Credit Suisse Chemical and Ag Science investor conference in New York, would not predict whether he sees the partnership, called Belarusian Potash Company, re-forming.

But he said the new sales strategy may not last.

"I don't think a volume over price strategy passes the economic sniff test," Prokopanko said. "Giving it away, I don't understand whose benefit it serves. I just don't see that what we have today, one competitor's strategy of volume over price, is sustainable for very long at all."

The market has over-reacted to the break-up of BPC, one of two global trading partnerships whose members have long adjusted production to support price, Prokopanko said. Even so, it is one factor, along with the collapse of the Indian rupee and a seasonal slowdown in fertilizer demand, that has left buyers cautious, he said.

On Monday after markets closed, Mosaic cut its third-quarter sales and price outlooks for potash and phosphate.

The company's shares were down 1 percent in New York to $45.07 on Tuesday morning, but its losses were smaller than those of North American potash rivals Potash Corp of Saskatchewan and Agrium Inc.

Mosaic is the world's largest producer of finished phosphate products and North America's second-biggest potash producer. Mosaic, Potash Corp and Agrium own the potash export company Canpotex Ltd.

Indian imports of potash, which farmers use to boost growth of crops like wheat, cotton and rice, have fallen off as the rupee's decline and a government subsidy program that favors nitrogen over potash makes purchases more expensive. But Prokopanko said Brazil will use record volumes of potash and phosphate this year, and that Mosaic expects an "outstanding" autumn fertilizer season in North America.

In the longer term, population growth and a surge in demand for food look to drive up global potash shipments by 2.9 percent annually this decade to 70.3 million tonnes in 2020, from 52.6 million in 2010, Prokopanko said.

Buyers Guide

Doyle Equipment Manufacturing Co.
Doyle Equipment Manufacturing prides themselves as being “The King of the Rotary’s” with their Direct Drive Rotary Blend Systems. With numerous setup possibilities and sizes, ranging from a  more...
A.J. Sackett Sons & Company
Sackett Blend Towers feature the H.I.M, High Intensity Mixer, the next generation of blending and coating technology which supports Precision Fertilizer Blending®. Its unique design allows  more...
R&R Manufacturing Inc.
The R&R Minuteman Blend System is the original proven performer. Fast, precise blending with a compact foot print. Significantly lower horsepower requirement. Low inload height with large  more...
Junge Control Inc.
Junge Control Inc. creates state-of-the-art product blending and measuring solutions that allow you to totally maximize operating efficiency with amazing accuracy and repeatability, superior  more...
Yargus Manufacturing
The flagship blending system for the Layco product line is the fully automated Layco DW System™. The advanced technology of the Layco DW (Declining Weight) system results in a blending  more...
Yargus Manufacturing
The LAYCOTE™ Automated Coating System provides a new level of coating accuracy for a stand-alone coating system or for coating (impregnating) in an automated blending system. The unique  more...
John Deere
The DN345 Drawn Dry Spreader can carry more than 12 tons of fertilizer and 17.5 tons of lime. Designed to operate at field speeds up to 20 MPH with full loads and the G4 spreader uniformly  more...
Force Unlimited
The Pro-Force is a multi-purpose spreader with a wider apron and steeper sides. Our Pro-Force has the most aggressive 30” spinner on the market, and is capable of spreading higher rates of  more...
BBI Spreaders
MagnaSpread 2 & MagnaSpread 3 — With BBI’s patented multi-bin technology, these spreaders operate multiple hoppers guided by independent, variable-rate technology. These models are built on  more...

Comments (0) Leave a comment 

e-Mail (required)


characters left

Pacesetter Grain Hopper

The Pacesetter Gain Hopper features original and innovative ideas like the patented RollerTrap™, the industry’s easiest to open and maintain trap ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Feedback Form