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The Mosaic Company Message Board

  • rdravin rdravin Jul 30, 2013 10:07 AM Flag

    Who benefits from crashing Potash?

    Let's say potash drops, as forecast, to below $300/ton. Which companies benefit?

    First beneficiary should be farmers. Increased fertilizer application implies higher yield, and perhaps dropping farm futures.

    Are there any companies that come to mind?

    Crisis and opportunity walk the same path.

    Sentiment: Hold

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    • too much logic in your argument, my take is fertilizer companies rock the boat to produce less with higher prices, and then when the demand increases, higher prices equal bigger profits.. from time to time market needs a reset to create a new baseline.. today is a reboot to get a clean beginning.. these fertilizer companies have a monopoly in producing and setting prices for basic human needs.. no way, they're going suffered because some bogus reasons. at the end of the day, MOS is going move back up above $50

    • Maybe companies like General Mills, Kellogg, Archer Daniels, Kraft.

    • Actually I think this is a good thing longer term for lower cost players like Mosaic and Potash. Both can make money at $300/ton . This will not benefit higher cost players so you will see some players exiting the Potash market. Potash is under applied because of its cost. India for example, could use a lot more Potash if the price falls. Volumes will go up and some higher cost projects will be cancelled so then supply will fall.

    • The end users will benefit and the suppliers get a sledge hammer to the head. To pull out of price support must mean they can produce products cheaply or what?

      Sentiment: Hold

      • 1 Reply to bill1k
      • Russia's Uralkali (URKA) is the only producer that can ship directly to China by rail. It is looking to increase its volume to China. It's new strategy is volume over pricing . At lower potash prices, it expects to capitalize on its competitive advantage vis-à-vis China by significantly increasing share, It expects this share increase to more than compensate for the lower potash prices.

        Sentiment: Hold

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