One of Saskatchewan’s biggest economic drivers is expected to take a dive on the market.
Analysts at Macquarie Group told the Financial Post on Monday potash prices are expected to drop from US$300 per tonne to US$250 next year. The group said the slump will shift pricing power from sellers to buyers.
Brooke Dobni, who is a professor with the University of Saskatchewan’s Edwards School of Business and the PotashCorp Chair for Saskatchewan Enterprise, said the last six years have been great for the potash industry but that the industry’s outlook depends on supply and demand.
“I think what we’ve been seeing going forward is there’s been a slowdown in other economies around the world — particularly in China and India. Their growth isn’t as large as they initially projected, and that has an impact on all commodities,” Dobni said.
“Potash isn’t exempt from that.”
Both analysts said the stock could improve if investors support PotashCorp’s proposal to buy German company K + S AG.
