Shares of major North American potash producers fell sharply Tuesday on word that a Russian company is pulling out of a marketing group and is expected to undercut competitors’ prices for the fertilizer.
OAO Uralkali announced Tuesday it was withdrawing from a joint venture with another company from Belarus that set the price for about a third of the world’s potash supply. Instead, it plans to sell more potash to China, which buys about one fifth of the world’s supply of the fertilizer.
Uralkali has a much lower cost of production than rival PotashCorp of Saskatchewan, which was briefly Canada’s most valuable company in 2010 before the government stepped in and blocked a $40 billion takeover offer from Australian mining giant BHP Billiton.