BHP (NYSE:BHP) has let it be known that if they are able to acquire Potash (NYSE:POT), they will be moving away from a continuing relationship in Canpotex, the joint marketing arm of Potash Corp, Mosaic (NYSE:MOS) and Agrium Inc (NYSE:AGU).
The strategy of BHP will be to produce as much potash as possible, and not hold back production in relationship to market demand at the time, like the majors are doing now.
That could put a lot of pressure on junior potash companies if the price of potash ends up going down, based on new practices of BHP.
One possible positive effect could be growing interest from companies from China, who may decide to invest more in the potash juniors like Encanto Potash (OTC:ENCTF.PK), Western Potash (OTC:WPSHF.PK), IC Potash, and Allana Potash (OTC:ALLRF.PK), who are already in early stage operations, or Potash One (OTC:KCLOF.PK), an exploration company.
Either way, the bid for Potash by BHP is shaking up the industry, and before it's all through it'll look a lot different than it is at this time, and could provide potash users reprieve for pricing, although it'll put pressure on margins and earnings of other potash providers
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