the business of agriculture, potash is a necessary ingredient to make fertilizer. If you want higher yields from the land to feed the world, fertilizer is needed. The Potash industry for many years was controlled by a legal cartel – two of the largest were Russia and Canadian. These cartels lead to higher prices which benefited the companies and profits flowed. One of the Russian members has decided to go alone and prices have dropped. If you think of another cartel – OPEC which increased the high of oil, for many years the larger players have tried to keep oil prices high and oil companies have benefited. As you look around there are other industries in a cartel like positions. While in the cartel position the companies do very well because prices remain high. It also means they can make expensive mistakes, but the high cash flow makes up for the mistakes.

Linking to dividend paying companies, companies in a cartel like position are in great position to pay and continue to pay dividends. The stocks are attractive as the world continues to pay higher prices for their goods and services. However some in a cartel think the grass is greener on the other side or wish to enter into contracts by themselves. Competition generally involves lower prices, in the case of potash the price is expect to fall which causes a ripple effect on the cost of production and future production. As a consumer you want lower prices, as an investor cartels are wonderful.

There are more questions than answers, till the next time – to raising questions