Excerpts from Article:
"Potash Corp. of Saskatchewan Inc. has cut its profit outlook for this year due to weak demand after the breakup of a Russian-Belarussian potash cartel sent prices of fertilizer tumbling. The weaker forecast from Potash Corp. reflects difficulty the industry faces following the Belarus Potash Co. breakup in July. Russia’s OAO Uralkali withdrew from a partnership it had with rival Belarus’s Belaruskali, dismantling one of the two marketing alliances established to sell potash to the world. The Belarus joint venture and its North American counterpart, Canpotex Ltd., controlled 70 per cent of the potash market before the breakup and therefore could influence the price and global supply of fertilizer. Potash does not trade on any public markets, leaving price formation almost entirely up to producers of the product and their customers. “When does demand start to pick up? That is what everyone is trying to figure out,” said Jeff Nelson, equity analyst with Edward Jones." |
Homogeneous Oligopoly: oligopoly where products
are almost identical
Cartel: organization of independent producers that enter into an agreement to fix output or prices, usually illegal Oligopoly: market situation in which a few firms supply most of the goods and/or services Perfect Competition: market where uniform goods are bought and sold, and where prices are generally known; where there is competition between many buyers and sellers, and where no group of buyers or sellers attempts to fix prices |