The end of a bad year for potash producers; a sprinkle of hope in the new year
2013 was a turbulent year for the potash market. The break-up of the world’s biggest potash cartel in July sent prices on a downward spiral from which they have yet to recover.
Consequently, producers cut production targets, profit forecasts and jobs.
In December, PotashCorp of Saskatchewan said it would slash almost one in five jobs, the Financial Times reported. The company also said it would cut production at a “number of its sites.”
The Motley Fool recently wrote that “2013 is likely to go down as one of the worst years in the history of the fertilizer industry.”
So how much of their value did the biggest potash producers lose?
PotashCorp’ and Mosaic both shed about 20% on their share prices.
Israel Chemicals, which trades on the Tel Aviv Stock Exchange, dropped nearly 40%.
Uralkali – the Russian company that initiated the cartel break-up – shows a 30% loss for the year.
Meanwhile, Canada’s Agrium escaped a lot of the carnage, shedding only 12%. As the Motley Fool pointed out, this is mainly because fertilizers only account for about 25% of the company’s business.
It looks as though 2014 could provide at least some relief: Uralkali and Belaruskali might be reuniting soon. Russian ambassador to Belarus Alexander Surikov recently announced that due to the change in Uralkali ownership, the company is “is ready to restore cooperation with Belaruskali,” RT reported.
Together, Uralkali and Belaruskali controlled about 40% of the potash market and had the power to control prices.