Potash Corporation of Saskatchewan (POT) is the world’s largest miner of potash, a main ingredient of many fertilizers. POT appears to sell potash to itself.
It sells potash to customers outside North America through Canpotex, a legal cartel owned by POT with its chief North American rivals, Agrium and Mosaic.
Canpotex’s an old story. Been around since 1972. What’s fascinating is that POT also owns 22% of Sinofert Holdings Ltd, a big Chinese potash importer.
Sinofert is one of Canpotex’s biggest customers. Indeed, on December 31, 2012, Canpotex and Sinofert concluded some very tough negotiations. The Globe and Mail’s article led off with the line “Canada’s potash cartel has blinked.”
Canpotex had to drop the price to $400 a tonne from the March price of $470.
The Globe quoted one exec, “The Chinese are very good negotiators and always have been [ . . .] And they are very good customers.”
It must get so confusing to negotiate. “Let me call my owners and get back to you. You want to talk to your owners before I hang up?”
Geoff Howe, Bloomberg
Or the road to that final compromise. “They say your final offer is $390. You say your final offer is $410. Do you want us to ask them to ask you to split the difference with you? Are you OK if you split the difference if they say you agree?”
It must be like trying to thumb wrestle with yourself.
The Risk Is Ours. 