The “cartel” that sets prices for potash began to unravel this week in Russia, causing prices to plunge. Good news for farmers, not so good news for potash miners. The announcement by Russian potash producer Uralkali that it would withdraw from its sales partnership with Belarusian Potash Co. (BPC) caused stocks for potash mining companies to drop. Uralkali forecast the move would cause potash prices to drop 25% to about $300/mt.

The majority of the world’s potash is sold through two marketing groups: BPC and North America’s Canpotex. Canpotex represents Potash Corp. of Saskatchewan, Mosaic and Agrium. The two traders for years have set identical prices for major markets, hence the cartel reference. Uralkali pulling out of the arrangement would be similar to Saudi Arabia pulling out of OPEC.

Uralkali and BPC had been partners for eight years and during that period saw potash prices rise as high as $900/mt just before the global financial crisis. The trading of Uralkali shares were briefly suspended in Moscow after falling 20%. Uralkali sells about 20% of global potash production and it will now sell through its own subsidiary, Uralkali Trading.