On Wednesday, Alta Corp. downgraded shares of Potash Corporation of Saskatchewan POT from Sector Perform to Underperform and maintained a $28 price target.
Analyst John Chu is concerned “Uralkali's recent potash potash contract with India for 800k tonnes (up ~50% y/y)...may be a repeat of the situation that played out with China earlier this year.”
Chu noted “Uralkali was the first to sign a contract with China for ~30% higher y/y volumes that came at the expense of Canpotex volumes.”
Should Canpotex's volume to India fall under one million tonnes, the analyst “would not be surprised.”
“A weak Rupee and lower potash subsidies could also act as demand headwinds,” Chu said.
Shares of Potash are down 1.59 percent to $34.76 in Wednesday's trading.
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