Thursday, 20 November 2014

Uralkali accident likely to hit farmers

Uralkali is a Russian potash fertiliser producer listed on the London and Moscow Exchanges.

They export to over 60 countries including Brazil, India, China, Southeast Asia, Russia, USA, and Europe.
In 2013 Uralkali produced 10mmt of potash so it’s probably not overkill to say that a recent mine accident which has threatened some 2.5mmt of capacity will hit supply and lift global potash prices.

A 40m diameter sink-hole appeared at one of its mines suspending operations and further collapses and flooding have left a high degree of uncertainty over its future.

Uralkali intends to accelerating development at other mines to make up the shortfall but admit plans would take some time to realise and there would be no replacement capacity in the next three years.

Not good news for farmers already facing two seasons of low commodity prices coupled with increasing costs and restricted markets.

Uralkali shares fell 21% in Moscow on Wednesday.