Global Potash Fertilizer Overcapacity Will Occur During 2012-2014

The second World Potash Conference initiated by a Chinese company closed in Saskatoon, Saskatchewan, Canada. According to the delegates, from the perspective of the existing potash fertilizer production facilities and the potash fertilizer production facilities currently under construction, the global potash fertilizer products will have a serious surplus, and 60 million tons of surplus products will not be digested. We must be alert to the overcapacity that will occur. In the crisis, it is necessary to adjust the global potash supply and demand system in order to meet the national conditions. The famous potash expert Professor Robert pointed out at the meeting: “To solve the problem of excess potash fertilizer production in future, potash fertilizer producers in various countries need to work closely together to establish an effective pricing mechanism and a good market order. Only according to the prices of agricultural products in different countries, formulate appropriate The price of potash fertilizer is to promote consumption, so as to truly realize the rational use of potash fertilizer products."

Delegates pointed out that from 2012 to 2014, there will be global excess production of potash fertilizer, and a reasonable supply and demand system should be established to develop the potash fertilizer industry. The price of potash fertilizer should not be over-hyped, and unreasonable consumption should not be guided. Otherwise, it will inevitably bring about serious consequences of overcapacity, so that the investment in potash fertilizer companies will recover slowly and suffer economic losses. Due to high export prices of some products, some countries have boycotted potassium potash installations in Canada, and some are only about 20%. Representatives from Brazil said that due to the poor sales of domestic potash, Brazil will further reduce the purchase volume to resist the price increase.

Canada is the region with the most abundant potash resources in the world. Many foreign companies have entered the potash field in Canada to mine potash and build potash fertilizer plants. In China alone, Changlian Oil, Zhongchuan International, Salt Lake Taiji Group, and Yanzhou Coal have already acquired potash prospecting rights in Saskatchewan, Canada. Due to the large amount of potash reserves, mining area and proposed production facilities purchased by Chinese companies entering the province of Saskatchewan, the potassium fertilizer companies in Canada are highly concerned. Once these production facilities are put into operation on schedule, they will not only cause a great impact on local companies, but will also put pressure on product sales.

At present, with the intensification of international potash fertilizer resources, potash fertilizer companies in various countries are optimistic about Canada's high-quality potash resources to reduce costs and enhance competitiveness. Now Saskatchewan has seen a trend of resources being split by foreign companies. BHP Billiton’s hostile takeover of Canada Potash Corp. in Saskatchewan last year caused a lot of criticism and finally came to an end after the Canadian government banned it. However, BHP Billiton has purchased more than 10,000 square kilometers of potash mineral rights in Canada in various ways within a short period of 3 years. It is conservatively estimated by the industry that BHP Billiton currently has planned annual production capacity of more than 10 million tons in the potash field.

Faced with the competition of international potash giants, Canadian companies stated that they also need to adjust their production speed to ease the pressure caused by the mining of potassium ore and potassium production in many countries in Saskatchewan. They also have to consider the future market. The supply structure, on the one hand, has to increase market share by improving the competitiveness of domestic companies' products, and on the other hand, it will develop in areas rich in potassium in Africa, such as Congo (Brazzaville) and the Congo, and seize low-cost, high-quality potash resources.

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