Slowing potash market to hinder Saskatchewan economy
A cooling potash market is expected to have a major adverse impact upon the 2012 economic performance of the Canadian province of Saskatchewan according to a recent bank report.
CBC News reports that a new report by the Royal Bank of Canada has dialed down its GDP growth forecasts for Saskatchewan from 3.6% and 4.6% for 2012 and 2013 respectively to 2.8% and 3.5%.
RBC's chief economist Craig Wright attributes much of growth reduction to reduced purchases of potash by developing nations as they await the negotiation of purchasing contracts.
"It seems that emerging economies are holding back on purchases of potash until long-term agreements have been signed with major producers in the province," said Wright in an official press release.
The RBC nonetheless expects Saskathewan to be the "growth leader" in the Canadian economy over the next two years, with potash activity set to recover gradually next year following the eventual execution of purchase agreements, and fertilizer purchases to receive a boost from the drought in key US farming regions last season.