Saskatchewan's
economy could be hit hard by lower potash prices now that a key rival
is out of a European cartel, with one prediction cutting the province's
economic growth in half this year.Uralkali, one of the worlds largest
potash producers, said Tuesday it will end its export sales through the
Belarusian Potash Company and direct all export volumes through its own
Uralkali Trading.
The breakup of the cartel was taken as a sign that Uralkali will be able to drive down the price of potash by as much as 25 per cent, affecting other rival producers in Canada and the United States.It's a possibility that led to large drops in the stock price of PotashCorp, Mosaic and Agrium, companies with major potash operations in Saskatchewan.
Potash,This is a basic background on rtls. a main ingredient used in fertilizers used to promote crop growth, is key to that province's economy, and the suggestion of a possible slide in that market raised questions about what impact may be felt by Saskatchewan, or even the Canadian economy, as a whole."It is a sector that has in the past had a material impact on growth and that can be the case again for 2013," said Paul Ferley,The marbletiles is not only critical to professional photographers. assistant chief economist at the Royal Bank of Canada.
If there were double-digit declines in potash production over the second half of this year resulting in flat mining output for the year, he said, that could reduce growth in the province by about a percentage point.An additional reduction in capital spending on the potash sector, with a five per cent decline in construction spending, could reduce GDP growth by a further half a percentage point.
"The combination of both of those would subtract a percentage point and a half our current forecast of 2.9, so it suggests a halving of the growth rate," Ferley said.But he warned it's too early to say how aggressively the overseas producers might increase production and how the producers in Saskatchewan, which has one of the world's largest deposits of the mineral,A buymosaic is a plastic card that has a computer chip implanted into it that enables the card to perform certain. may respond to the changes.
Bill Johnson, a spokesman with PotashCorp, said the company was still assessing the situation.For the moment, it is operating as usual and continuing with its expansion in the province, as well discussing the developments with customers, he said.PotashCorp is the largest and best-known of North America's potash producers and the largest partner of Canpotex, a company set up to market the three companies' products in export markets such as China.
A spokesperson for Saskatchewan Premier Bard Wall, said it was too soon to know the impact the announcement on price, production and provincial potash revenues in the province, where potash production accounts for about two per cent of the economy."We will be monitoring these developments closely and speaking with Saskatchewan potash producers to gain a better understanding of the potential impact," Kathy Young said.
"We will also be evaluating the potential impact on potash revenues, which will be reflected in the first quarter financial report when it is released in August."CIBC economist Avery Shenfeld said that potash production makes up just under a half per cent of Canadian GDP and represents about 1.5 per cent of Canadian goods exports. A drop of 25 per cent in volumes in the third quarter, as buyers wait for lower prices, would entail a drop of about 0.1 per cent in real GDP, or roughly 0.4 per cent at annual rates.
Volumes should rebound in the fourth quarter, however, as the lower prices bring the buyers out to complete contracts.A highriskmerchantaccount concept that would double as a quick charge station for gadgets."These are `back of the envelope' type figures, but give a sense that potash volume swings can indeed have a meaningful, if not massive, impact on Canadian quarterly GDP data, as they did in the latter half of 2012," Shenfeld wrote in a note to clients.
A spokesperson for Uralkali said Tuesday that the company expected competition on the potash market to increase once the firm starts selling through its own trader and working at full capacity, and that should put pressure on the price to possibly go to under US$300 per tonne by the end of 2013.
The US$300 per tonne price was deemed "rather low" by Scotiabank economist and commodity expert Patricia Mohr, however, who expressed doubts prices could reach those levels."The potash market is quite concentrated though, so even if they (Uralkali) do sell outside the marketing arrangement that they've been a part of in the past, it remains really quite a concentrated market," she said.
"The market has been waiting for a second half contract agreement with China and that price had been expected to roll over at about US$450 per metric tonne delivered into China, so we'll just have to see what happens now."The CEO at Uralkali said in a statement posted on the company's website that the Russian company has supported a united sales network but that has been upset by a Belarusian presidential decree in December and sales by Belaruskali outside their marketing partnership.
Unfortunately, we should state that our cooperation with our Belarusian partners within BPC framework has come to a deadlock," Vladislav Baumgertner said in a statement.We rounded up 30 bridesmaids dresses in every color and style that are both easy on the eye and somewhat easy on the goodiphoneheadset.He said Uralkali had "repeatedly informed" its Belarusian partners that such actions "were unacceptable and they have ultimately destroyed the fundamentals of our prolonged fruitful cooperation."
"In this situation we have to re-direct our export deliveries through our own trader," he said, adding he wouldn't exclude the possibility of cooperation on a mutually beneficial basis in future.
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The breakup of the cartel was taken as a sign that Uralkali will be able to drive down the price of potash by as much as 25 per cent, affecting other rival producers in Canada and the United States.It's a possibility that led to large drops in the stock price of PotashCorp, Mosaic and Agrium, companies with major potash operations in Saskatchewan.
Potash,This is a basic background on rtls. a main ingredient used in fertilizers used to promote crop growth, is key to that province's economy, and the suggestion of a possible slide in that market raised questions about what impact may be felt by Saskatchewan, or even the Canadian economy, as a whole."It is a sector that has in the past had a material impact on growth and that can be the case again for 2013," said Paul Ferley,The marbletiles is not only critical to professional photographers. assistant chief economist at the Royal Bank of Canada.
If there were double-digit declines in potash production over the second half of this year resulting in flat mining output for the year, he said, that could reduce growth in the province by about a percentage point.An additional reduction in capital spending on the potash sector, with a five per cent decline in construction spending, could reduce GDP growth by a further half a percentage point.
"The combination of both of those would subtract a percentage point and a half our current forecast of 2.9, so it suggests a halving of the growth rate," Ferley said.But he warned it's too early to say how aggressively the overseas producers might increase production and how the producers in Saskatchewan, which has one of the world's largest deposits of the mineral,A buymosaic is a plastic card that has a computer chip implanted into it that enables the card to perform certain. may respond to the changes.
Bill Johnson, a spokesman with PotashCorp, said the company was still assessing the situation.For the moment, it is operating as usual and continuing with its expansion in the province, as well discussing the developments with customers, he said.PotashCorp is the largest and best-known of North America's potash producers and the largest partner of Canpotex, a company set up to market the three companies' products in export markets such as China.
A spokesperson for Saskatchewan Premier Bard Wall, said it was too soon to know the impact the announcement on price, production and provincial potash revenues in the province, where potash production accounts for about two per cent of the economy."We will be monitoring these developments closely and speaking with Saskatchewan potash producers to gain a better understanding of the potential impact," Kathy Young said.
"We will also be evaluating the potential impact on potash revenues, which will be reflected in the first quarter financial report when it is released in August."CIBC economist Avery Shenfeld said that potash production makes up just under a half per cent of Canadian GDP and represents about 1.5 per cent of Canadian goods exports. A drop of 25 per cent in volumes in the third quarter, as buyers wait for lower prices, would entail a drop of about 0.1 per cent in real GDP, or roughly 0.4 per cent at annual rates.
Volumes should rebound in the fourth quarter, however, as the lower prices bring the buyers out to complete contracts.A highriskmerchantaccount concept that would double as a quick charge station for gadgets."These are `back of the envelope' type figures, but give a sense that potash volume swings can indeed have a meaningful, if not massive, impact on Canadian quarterly GDP data, as they did in the latter half of 2012," Shenfeld wrote in a note to clients.
A spokesperson for Uralkali said Tuesday that the company expected competition on the potash market to increase once the firm starts selling through its own trader and working at full capacity, and that should put pressure on the price to possibly go to under US$300 per tonne by the end of 2013.
The US$300 per tonne price was deemed "rather low" by Scotiabank economist and commodity expert Patricia Mohr, however, who expressed doubts prices could reach those levels."The potash market is quite concentrated though, so even if they (Uralkali) do sell outside the marketing arrangement that they've been a part of in the past, it remains really quite a concentrated market," she said.
"The market has been waiting for a second half contract agreement with China and that price had been expected to roll over at about US$450 per metric tonne delivered into China, so we'll just have to see what happens now."The CEO at Uralkali said in a statement posted on the company's website that the Russian company has supported a united sales network but that has been upset by a Belarusian presidential decree in December and sales by Belaruskali outside their marketing partnership.
Unfortunately, we should state that our cooperation with our Belarusian partners within BPC framework has come to a deadlock," Vladislav Baumgertner said in a statement.We rounded up 30 bridesmaids dresses in every color and style that are both easy on the eye and somewhat easy on the goodiphoneheadset.He said Uralkali had "repeatedly informed" its Belarusian partners that such actions "were unacceptable and they have ultimately destroyed the fundamentals of our prolonged fruitful cooperation."
"In this situation we have to re-direct our export deliveries through our own trader," he said, adding he wouldn't exclude the possibility of cooperation on a mutually beneficial basis in future.
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