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Potash Corp. of Saskatchewan, Inc. Message Board

  • ralphjlindblom ralphjlindblom Aug 16, 2013 4:09 PM Flag

    Indian & China future potash contracts

    Lots of news yesterday and today (you can gooxxgle it)

    India seeking 11% reduction in already agreed upon contracts for the rest of this year.

    China and India seeking a 25% reduction in future contracts.

    China stating that they will not accept a contract that asks them to pay $300 or more per tonne. They state that they have too much inventory on hand already.

    This helps to explain today's weakness.

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    • I hate to say it, but as I said a few weeks ago - the China/India benchmark price has not been settled yet, and this is going to be negative for Potash.

    • Ralph, I thought about another thing regarding India's cheeky request to have their existing contracts modified to reflect an 11% reduction due to a decline in the value of the rupee. Now when the rupee was rising some years ago against the dollar, I don't recall Canpotex holding out its hand for more money given that the value of the U.S. dollar had declined. And why should Canpotex take it in the neck just because India can't manage its own economy? Cheeky beggars, that is what I say.

    • I saw that article, Ralph, but it looks like a lot of agitprop to me. As far as India goes, there is no precedent for a reduction in price for an existing contract so I would expect that they can punch sand on that score. And, sure, India and China want big reductions in future contracts. Perhaps even free potash. But this is just pre-negotiation blather. It remains to be seen what they finally end up with. And my guess is that the Chinese are full of you know what with regard to how much inventory is on hand. And if they really were full of it, then why negotiate a contract for additional product? Sounds counterproductive to me. Now I am not saying that there might not be distributors with product on which they are sitting and losing money as a result of the Uralkali outburst. Uralkali started this so now it is up to them to see what they are going to get. We have seen before that if Canpotex does not like the price, they walk and wait for better times.

 
POT
36.54+0.4600(+1.27%)Jan 30 4:04 PMEST

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