Bloomberg news reports that the global potash industry is
nervous because demand has been increasing and any disruption in supplies could
result in shortages.
Earlier this month the roof of a mine in Belarus collapsed
and that was enough to trigger stock-market reactions, including on the Toronto
Stock Exchange.
Demand
has been constantly increasing and any change in production from the world’s
top suppliers in Canada, Belarus and Russia has the potential to impact the
market dramatically, said Daniel Sherman, a senior analyst for Edward Jones in
St. Louis.
“If a
large mine in one of those suppliers is hit, it’s clearly going to put a dent
in the supply,” Sherman told Bloomberg News by telephone. “One of the key
things is the supply is very concentrated.”
State-owned
Belaruskali is the world’s second-largest potash producer and is one of three
companies, alongside with Russia’s Uralkali and North America’s Canpotex, that
accounts for more than 60 percent of total output.
While
Belaruskali insists there is no threat to production, the accident has shown
how vulnerable the market is to disruptions at a time when demand is poised to
rise.
India
and China are negotiating supply contracts, buyers are looking to purchase
fertilizer ahead of spring in the Northern Hemisphere, and Canadian producers
recently idled one million metric tons of output in an effort to bolster
prices.
