A potash cartel?

Yesterday it was announced that one of the two global potash cartels is disbanding, sending the natural resources market and the stock market into a frenzy. Belarus Potash Company (BPC) will no longer exist as one of the companies involved has decided to walk away from the partnership.

This could have a huge impact on Canpotex Ltd, which is made up of three other organizations. These two marketing groups, have been considered and perceived as cartels because they control so much of the world’s potash supply and control the market for pricing. The global potash market was essentially a duopoly before this announcement.

Canpotex includes Potash Corporation of Saskatchewan, Agrium Inc, and Mosaic Co. Companies that most people have never heard of. The BPC consists of Uralkali from Russia and Belaruskali. These two marketing groups combined control about 70% of the world’s potash exports and have combined revenues of more than $10 billion, so this is a sizable industry that most people have never heard of.

The interesting point about this news is not only that one of the marketing groups is disbanding, but that there are only two marketing groups in the world and they control most of the production and pricing of potash. Who knew?