http://online.wsj.com/home-page
Dmitry Osipov Says Potash Firm Has Regained Its Market Share After Splitting BPC
LONDON—Russian potash giant Uralkali URKA.MZ +4.26% JSC has no plans to restore a sales partnership with Belarus, dimming prospects for reviving a global pricing cartel for the fertilizer ingredient.
Share prices of major potash producers in North America, Germany and Israel have rallied this year, partly on hopes that two of the world’s leading producers of the crop nutrient could be reconciled. But Uralkali Chief Executive Dmitry Osipov said in an interview there have been no talks since April and none are planned.
“There are no negotiations going on at the moment with Belarus, with the BPC,” said Mr. Osipov, referring to the Belarusian Potash Co., its trading partnership with state-run Belaruskali OAO that collapsed last summer.
Uralkali’s decision to exit BPC ended an informal global-pricing cartel made up of BPC and North America’s Canpotex Ltd. that once controlled two-thirds of the world’s potash supply. The Russian miner’s move sent potash company stocks plunging last year, sparked a furious response by Belarus and landed the Russian company’s former boss in a Belarusian jail.
Prices that averaged $400 a ton before Uralkali broke away from the BPC fell in the wake of the move, but have since begun to recover.
And prices didn’t fall as low as some analysts had predicted, due in part to better-than-anticipated demand from Brazil and China. Uralkali’s market-share recovery to 23% of the global export market in the first half of 2014, up from 17% a year ago right after the breakup, also makes a deal with Belaruskali less pressing.
“We sell through our own channels; they sell by their own,” Mr. Osipov said of his former partner.
Prospects of a peace between Uralkali and Belarus appeared to gain traction when Minsk-born fertilizer tycoon Dmitry Mazepin became one of Uralkali’s leading investors in December. Mr. Mazepin discussed the situation with Belarusian President Alexander Lukashenko in April in a meeting that Mr. Osipov described as “quite positive.”
Since then, however, there have been no further discussions, Mr. Osipov said. Restoring ties with BPC would raise a series of questions, he said. “Under what conditions should we build this new marketing vehicle? Where should be the headquarters; what should be the proportion; what should be the aim; what should be the goal? There are no answers to these questions.”
When Uralkali exited BPC, executives at North American potash producers predicted the partners would eventually resume their trading relationship. Then in August, Uralkali’s CEO Vladislav Baumgertner was jailed in Belarus shortly after accepting an invitation from Mr. Lukashenko to try and resolve the situation.
For the rest of this article, click here: http://online.wsj.com/articles/uralkali-ceo-says-no-talks-to-resume-potash-marketing-pact-with-belarus-1410900387?tesla=y&mg=reno64-wsj&url=http://online.wsj.com/article/SB10772401218227423777504580158394140438022.html