BHP (NYSE:BHP) May Get Rival Bid for Potash (NYSE:POT) from Russian Company

The more you hear about the opposition to BHP's (NYSE:BHP) bid for Potash Corp. (NYSE:POT), the more you realize it's a good thing, and you check under the more carefully as to why there is such an uproar over a simple bid for the company.

It has largely to do with the misguided partnership of the province of Saskatchewan with Potash, where the Canpotex cartel wrongly manipulates prices and supply in order to maintain the prices and margins they want.

They have a major competitor in the Belarusian Canpotex cartel as well, although they seem to work closely in unison as far as pricing and supply goes, effectively controlling the overall global market.

This is why Phosagro, a Russian-based company has emerged out of nowhere as a potential bidder for Potash, as they recognize the threat to the control of potash from BHP Billiton.

Phosagro's chairman, Vladimir Litvinenko, said, "If BHP controls the potash market, the consequences for our producers may be serious ... we can lose part of [our] markets. This is obvious."

This is also the reason Saskatchewan has been opposing the bid, as they have a sweetheart royalty deal with Canpotex over potash produced in the province, and the also see BHP as a detriment to their siphoning off of billions from the above-market prices and royalties generated from the cartel.

Why this is a threat is because BHP doesn't like the cartel mentality and obvious socialist way the consortium is being operated, and have publicly stated they will produce potash at the rate they choose to and charge competitive prices, not what the other members of the cartel want them to charge, which include Mosaic (NYSE:MOS) and Agrium (NYSE:AGU).

The bottom line? BHP would be good for the industry which has been silently controlling the price of potash, which by extension, controls, to a certain degree, the price of the crops that use the fertilizer.

BHP would be one of the best things to happen to the industry if they are allowed to go forward with the bid and take charge of Potash Corp.