The Mosaic Company (MOS) CEO Joc O'Rourke presents at Bernstein 35th Annual Strategic Decisions Brokers Conference (Transcript)
May 30, 2019 1:39 PM ETThe Mosaic Company (MOS)
Unidentified Analyst
Okay. Switching over to potash; potash prices have held up much better than phosphate or nitrogen for the last six months or so. What would you attribute that to?
Joc O’Rourke
I think it's -- let's start with industry structure. You have five players that basically 75% of the product. I think each of those players understands that there is more value in maintaining a steady market than there is and you're fighting for that last ton of sales, if you will. And so from that perspective and we just saw it in Indonesia, I think where the bids or the bids opened were 330, so that's a good table price for Indonesia. And I think what 360, 358 in Bangladesh. So again, you're looking at -- the bid numbers are coming in saying, "Hey, we really don't think this should be any lower than where it is today." And that's been consistent. Well, I think that helps the market.
Unidentified Analyst
Okay. So Indonesia comes in at 330. That's usually the leading indicator for the Chinese contracts. How confident do you feel the Chinese will go up…?
Joc O’Rourke
Again, this is the opening of the tender. We don't know if that'll be the final price or anything, so just to be clear on that. But, the China contract today and for those of you who aren't well aware of it, it's a benchmark. But, it is becoming probably less and less relevant in terms of the big picture of global trade in potash. But, I would say today neither the supplier or the consumer has more power in that. It's a balanced market. The suppliers are well-disciplined, but there's no question the Chinese buyers are well-disciplined as well. So I don't see a strong benefit to either one. So I think you're looking at maybe a minor improvement in price or a minor increase in price or flat or something like that, but not a big move. There's not the dislocation of value of this.
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