BHP Billiton’s entry into the potash industry through a bid for market leader Potash Corp could shake up a cozy system of pricing and production if, as some expect, the newcomer shuns existing arrangements and runs plants at full capacity.
A coterie of companies dominates the global trade in potash right now, using their clout to underpin prices when they are low and take advantage of a strong market when they are high.
The two big exporters are Canada’s Canpotex, controlled by Potash Corp, Mosaic Co and Agrium Inc, and the Belarussian Potash Co, which groups eastern European producers. Canada, Russia, Belarus, Germany, Israel and Jordan account for roughly 90 percent of world supply.
BHP, for its part, has traditionally shunned such marketing groups, and runs plants at full capacity regardless of price. It said on Friday that if it is successful in taking over Potash Corp, it would ultimately look to pull out of Canpotex.
