Potash markets have turned soft following a strong spring driven by record spring plantings in the U.S. as international demand has turned weaker, writes James Wellstead for Potash Investing News. The weaker demand has come on disappointment from India and China, he says, with the result that potash stockpiles have grown.
"India in particular has been a point of weakness for the market as a whole, as it has been oversupplied with potash fertilzer carried over from previous contracts with Russian and Canadian producers," Wellstead reports.
While two potash company CEO's are quoted as saying they expect prices to firm soon, India's fertilzer secretary is quoted as saying India will not look for additional potash purchases until September as the nation's fertilizer companies have adequate supplies. Wellstead reports recent weak demand has prompted PotashCrop to cut its summer warehouse potash prices to levels 9% below company prices of a year ago. He lists granular potash prices of $510 to $520 starting on June 11 and continuing until July 21.
Meanwhile, market analysts look to recovery in Brazil's soybean and sugar crop plantings for next season as a potential positive for potash demand. Brazilian farmers are expected to plant a record 26.4 million hectares for the 2012-13 season, 5.4% more than the 2011-12 season.
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