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Potash Corp. leads fertilizer stocks on rampage

A string of positive developments have lit a fire under North American potash stocks with Potash Corp. of Saskatchewan leading the charge.

The industry bellwether has made investors almost $5 billion richer since Tuesday after an Indian bid for Belarus’s state-owned producer valued that company at close to $30 billion. The news came after the EU’s largest player said its profits could jump 40% over the next six months and disappointing corn harvests in the US boosted demand for the soil nutrient.

Potash Corp. dragged higher the whole sector which also saw the listing of a potash from waste firm on Monday.

Potash Corporation of Saskatchewan, at $46.5 billion one of Canada’s most valuable companies, was trading up 0.7% shortly before the close on Monday after adding almost 11% since last Tuesday.

Stock in speculator favourite Allana Potash Corp which is advancing a project in the Danakil Depression, Ethiopia added just over 5% in heavy volumes on Monday brining its gains to 10% over the last five trading days. On Wednesday the company announced a new chair and that it is applying for a listing on the Toronto main board.

Western Potash has clawed back 20.4% since last Tuesday but is still down 10.9% on its TSX listing price of mid-July. The company is in the pre-feasability stage of its Milestone Project in south Saskatchewan where it hopes to mine almost a billion tonnes of potash using the solution mining method.

US-based Intrepid mirrored Potash Corp.’s moves and is up 8.3% over the last five trading days. The company owns five potash production facilities, three in Carlsbad, New Mexico and two in Utah and is worth some $2.32 billion on the NYSE.

The sector also saw a new listing – shares in Organic Potash Corporation which plans production of 40,000 tonnes potash from cocoa husk ash at a facility in Ghana commenced trading on the Canadian National Stock Exchange on Monday. Less than an hour before the close no shares had changed hands. Bids were for 10c.

Bloomberg reported on Thursday Germany’s K+S, Europe’s largest producer, has raised prices for potash for customers in Europe, its main market, six times since March 2010 and full-year sales will rise as much as 14% to between 5 billion euros to 5.3 billion euros, with net income gaining as much as 41%.

Livemint first reported on Wednesday that India is seeking to buy 20%–25% of Belaruskali, for as much as $7 billion after Russia’s Sberbank agreed to take 35% of Belaruskali as collateral for a $2 billion loan.

Unusually high temperatures across the US Midwest have damaged corn crops, prompting the USDA to cut its harvest forecast to 12.9 billion bushels (328 million metric tons) from 13.5 billion bushels projected last month.