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Capacity Exapnsion, Bargaining power of customers, Russia could use potash as diplomatic tool

Huge capacity expansions are planned by existing players which are expected to increase supply from 2012. Also, new players such as Rio Tinto and BHP Billton have shown interest in entering the field. These new entrants along with there valuable cash experience and deep cash pockets can develop newer plants thus making the market over supplied.

Also, India and China purchase potash through a single agency which enables them to wield a lot of bargaining power. This was visible prior to 2005 which forced the potash producers to form cartels. Though this vantage point has lessened in recent times, they still have strength to resist further price increases

Russia is a major player in potash supply and the government can use it to lure emerging economies towards its side against its ongoing conflict with the west

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