Tuesday, September 16, 2008

Fertilizer companies accused of price-fixing

CHICAGO -- The world's largest fertilizer companies are being accused of price-fixing and collusion in two lawsuits.

One was filed Thursday in the U.S. District Court in Minneapolis by Minn-Chem Inc., a farm chemicals supplier based in Sanborn, Minn. The same day, Gage's Fertilizer & Grain Inc. of Stanberry, Mo., filed suit in the U.S. District Court in Chicago. Both suits seek class-action status.

Among the defendants are Potash Corp. of Saskatchewan Inc., Minnesota-based Mosaic Co., and Agrium Inc., a smaller Canadian producer.

Spokesmen for the companies denied wrongdoing, saying the price of fertilizer has risen in response to tight supplies of and increasing demand for fertilizer by farmers expanding grain and food production.

In several countries, obscure laws shield makers of potash and phosphate -- two key ingredients in fertilizer -- from certain antitrust rules. In the U.S., for example, phosphate makers are among a handful of industries empowered by the 1918 Webb-Pomerene Act to talk with competitors about pricing and other issues.

The allegations come as the fertilizer companies have reaped handsome profits during the global grain-price boom of the past two years. The price of phosphate, a major fertilizer ingredient, has climbed to about $1,100 a ton, up from $430 last year, while the price of a ton of potash, another fertilizer ingredient, is now more than $930, up from $275.

Not new news here. Just read the comments on this post on Potash! The only difference is that POT is now 70 points lower when this news is out!