Potash prices will continue rising

Analysts see another $100 increase this year

By Tom Stundza -- Purchasing, 1/30/2008 9:27:00 AM

Canadian fertilizer company Potash Corp. of Saskatchewan reports that its North American price for potash rose 29% in the fourth quarter to an average $214/metric ton. After eight years of lagging sales, phosphate demand worldwide recovered strongly in 2007, says Potash, which believes demand and prices will continue to trend up in 2008. A blogger at SeekingAlpha.com agrees, forecasting another $100/metric ton increase.

The Saskatoon-based company estimates 2008 shipments will rise ahead of Wall Street estimates by 7% to both North American and offshore potash markets—noting that rising commodity prices have spurred fertilizer demand.

“Demand for fertilizer is explosive,'' Paul Taylor, chief investment officer for Canada at BMO Harris Private Banking, a unit of Bank of Montreal, said last week in a conference call with reporters posted by Bloomberg. ``We still believe that there's lots of upside'' for Potash Corp. and Agrium Inc., a rival fertilizer producer, “There is little to no connection between a U.S. recession and most U.S. or global crop prices,” explains Bill Tierney, an agricultural economist at John Stewart & Associates in Washington.