You have to wonder what is up in the Saskatchewan potash industry. Just this week a layoff of 1000 workers was announced by Mosaic and before it is all over it is rumoured that up to 2500 potash workers in Saskatchewan may be looking for work. As I understand it the company concern is that with the price so high the demand may fall off during these economic times. I am told by those working in the mines that the demand remains high and that the price has not decreased.
Potash rose to a record spot price of US $862.50 per tonne in September, up from $802.50 in August, and stabilized at $865 into mid-October. In November, Canpotex, the export marketing consortium of Canadian potash miners, announced that it signed a new contract to supply potash to Japanese customers at a delivered price of just over $900 per tonne.
It is my understanding that the cost of mining that same potash is between $28.00 and $50.00 a metric tonne depending on the mine. Even when you factor in transportation costs, possibly the odd bribe in the third world and the multi-million dollar salaries the CEO’s get it makes you wonder. Holy smoke, that is a bit of mark up isn’t it? There is a world food shortage and these corporations are charging those kind of figures to developing countries for fertilizer?
From my perspective it is all a bit obscene but...perhaps that is just me.