Tomahawk, WI 8/02/2013 (Basicsmedia) – Potash Corp./Saskatchewan (USA) (NYSE:POT), which is Potash Corp of Saskatchewan Inc in full, has been going through some very difficult and trying moments. It is not the only company which operates under the industry dealing with agricultural chemicals. It has to contend with some major competitors such as BASF SE,  The Mosaic Company, and the Yara International ASA. This company has been around since 1963, and has established its headquarters in Saskatoon, Canada in addition to being the employer of more than 5k individuals. However, is there cause for worry?

What Is happening in the Potash Industry?

POT is mostly a manufacturer, seller and distributor of fertilizer in the U.S and Canada. It also sells feed and industrial products, though this doesn’t force it to get away from its core or main area which is all about the sale of potash or fertilizer. One of the major operators in the potash industry is a company in Russia known as Uralkali, and it recently undertook one exercise which almost led to total collapse of the industry.  It decided to liberate the production of potash with the aim being to attract better prices for this product. It succeeded in attracting lower prices.

POT is one of the companies which were seriously affected by the decision taken by Uralkali, since potash is the main product it deals in. However, the blame is not being attributed to the Russian company only, since the overriding feeling is that the industry was bound to experience such a turn of events sooner rather than later. There has always been a feeling that the price of potash is constantly being propped up artificially and not because of market forces. There is hope that what is happening now is going to lead to a situation where people buy based on real prices.

Has POT’s Stock Price Been Affected?

As expected, when such a move takes place in the industry, there is bound to be some serious repercussions both in the short and long term. As it seems right now, POT has suffered a serious beating in its stock price which has taken a nosedive. There is hope that this will not last for long and that very soon the prices will start responding positively because potash is a product which is still in great demand. The best companies, such as POT and MOS, will be left in the market to produce potash of the best quality to meet the demand which is already in place.

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Image indicating that the POT stock price has been on a downward trend. Image is courtesy of http://www.fool.com/investing/general/2013/07/31/potash-gets-pulverized-but-its-not-as-bad-as-it-lo.aspx.

This move has caused the death of cartels which had been in charge of setting prices for potash over very many years. If you own POT stock or shares at the present moment, don’t be in a rush to get rid of them in thinking that they are worthless. Uralkali might have done what it did deliberately so that it gains a better control of this market, while attempting to make its competitors such as POT to suffer and probably abandon the industry. Hold on to these shares for awhile until there is a bit of clarity regarding what is really going on. That is my advice.

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