Potash excess anticipation by bank

Global food of potash could outstrip appeal by amid 59 and 100 per cent by the end of the decade, a analysis address from the European coffer Rabobank warned.

The coffer said Tuesday the North American potash bunch Canpotex and its European counterpart, BPC, will not sit idly by while rivals accompany on added supplies.

But Rabobank said a key capricious will be the amount to which Brazil, India and China are able to abide uneconomic projects - either in their own countries or through investments away - to accommodated their own needs. Collectively, the three countries annual for about 40 per cent of the world's potash imports.

"In the end, it is mainly geopolitical and abiding cardinal aegis ambit that absolve such investments," Rabobank analyst Dirk Jan Kennes said in a statement.

"From a authentic economics angle, abounding of these investments adeptness cede losses if prices appear beneath burden due to oversupply."

Another agency is the adeptness of producers to defended costs for their mines, which is added of a botheration for baby players than for above ones, Rabobank said.

Canada has one of the world's better food of potash. Exports of the key crop comestible accept been a above antecedent of trade, as able-bodied as tax revenue, for the arena of Saskatchewan.

Canpotex markets the fertilizer away on account of the three better Saskatchewan producers: Potash Corp., Agrium Inc. and the American potash ambassador Mosaic Co.

Agrium agent Richard Downey said the amount of architecture a new abundance from blemish is too top to accomplish bread-and-butter faculty for a lot of fertilizer firms.

"Everybody says they're traveling to body one, but until you've in fact committed the billions of dollars it takes to body a new mine, there's actual little that has been appear that has started construction," he said.

German aggregation K+S Group bankrupt arena on its $3.25-billion Legacy abundance endure week, the aboriginal new potash abundance in Saskatchewan for about 40 years. Anglo-Australian mining behemothic BHP Billiton is adventure a achievability abstraction for its multibillion-dollar Jansen abundance in Saskatchewan, with an eye to starting assembly in 2015. There has been belief that the activity may be delayed due to bazaar conditions, but the aggregation says it is on track.

Most companies, however, are advancing alleged brownfield projects - expansions to absolute accessories that are abundant quicker and cheaper to accompany on.