The Belarusian Potash Company (BPC) was formed in 2005 when Belaruskali (45%), Uralkali (50%) and Belarusian Railways (5%) joined forces. BPC now accounts for 43% of global potash exports with customers in more than 50 nations, including the U.S.
BPC now reports that exports have increased to 1.5 million tons during the first quarter of 2013 thanks to a 21% increase year-over in shipments from BPC member Belaruskali.
Meanwhile, PotashCorp reports a 13% increase of it's own in potash profits for the same period. Mosaic reported last week in its quarterly statement that a lot of P&K had moved in the fall, leaving just 3.2 million tons to go for the remainder of their fertilizer 2012/13.
Global potash supplies are strong right now, but not good enough to support greenfield entries into the production game. As an example, Vale S.A. backed out of a South American project earlier this year (read more), and the balance sheet has turned against profits from new potash entrances upstream. We could see this play out as a narrowing of the potash players field, potentially forcing prices to firm in the next decade. But China and India have been good customers, first of Uralkali and then of BPC, and much of BPC's sendouts wind up in China, leaving the U.S. first in line for Canadian product.
In the short-run, we expect potash pricing to move mostly sideways in U.S. retail markets during the summer of 2013, and present an attractive prospect again in the fall. With BPC able to service Asian demand via rail, and South American markets via barge, the U.S. stands to benefit from our neighbors to the north, especially if product arrives via Canpotex railcars, rather than BPC barges.