Recently, potash market discussions have centered around the anticipated increase in potash production expected by 2015, but PotashCorp indicated this week that an oversupply situation is unlikely.

Rabobank’s global Food & Agribusiness Research and Advisory group published a report this week that predicts that too much potash will flood the market by 2020. The “Playing the Potash Field” report predicts that, although the potash outlook will depend on several key variables, regardless, there will be substantial overcapacity, ranging between 59 percent and 100 percent of demand.

“In light of the ongoing supply side developments from new players, the existing big players that form the two potash consortiums—Canpotex and BPC—will not sit back and watch,” according to the Rabobank report. “This is a key swing factor in the market toward 2020 as these players have the scale and market access to discourage most of the Greenfield investments. However, if the geopolitical motives of the major importers overrule the pure economic parameters, it will become very difficult to maintain the oligopolistic profits in the industry.”

 In a Web cast on Wednesday, Bill Doyle, president and CEO, PotashCorp, said that despite several companies announcing they are planning to increase capacity by 2015, it will be nearly impossible to do, especially if they are Greenfield projects.

“From our experience, we see that it takes brownfield expansions five to seven years to come online. Greenfields take longer than that,” Doyle said. “We don’t think these companies can really be up and running by 2015. The idea that there will be too much potash capacity by 2015 is way overrated and over played.”

Doyle also mentioned that he thought the prediction of 166 bushels per acre of corn this year was too high of an estimate. In fact, he said with the current weather conditions as they are, reaching that number will be impossible, he said.

“People have to remember that most of the corn was planted in April this year. When these predictions were made in April, we have to remember that we don’t harvest in April or June. With little snowpack to replenish subsoil moisture, the hot, dry weather now is more stressful on the crops because there is no subsoil moisture for the crop to lean on.”

Despite production curtailments, higher than normal North American potash inventory and typical summer shutdowns, Doyle said the company is expecting a strong fall 2012 season in terms of demand. He explained that the soils have been mined and not replenished this year. Since soils will need replenishing, he anticipates strong demand in the fall.