Potash Price-Fixing Lawsuit Revisited
A U.S. Appeals Court rules that a group of potash manufacturers must face a lawsuit for price fixing.
Published: Jul 2, 2012
Reversing a September decision, a U.S. appeals court determined that an anti-trust lawsuit is in order for the Saskatchewan-based Potash Corp and a handful of other potash manufacturers, with the original complaint alleging that the small group of companies has engaged in a price-fixing scam to inflate prices.
Potash, which is a derived from naturally-occurring ore deposits and used as agricultural fertilizer, has a limited reserve, with much of the production confined to Canada and the former Soviet Union.
Few companies dominate the potash market, including Potash Corp (Canada) and Potash Sales (U.S.), Mosaic Crop Nutrition (Del.), Agrium (Canada and U.S.) and a handful of Russian and Belorussian corporations.
A U.S. Appeals Court rules that a group of potash manufacturers must face a lawsuit for price fixing.In all, seven companies, including those above, are named in the suit filed by Minn-Chem, Inc. The 2011 complaint alleges that these seven companies produced 71% of the world's potash and restrained global potash output in order to inflate prices.
The complaint also alleges that the companies would first negotiate prices in Brazil, India, and China, then use those prices as benchmarks for U.S. sales.
The decision explains that the "cartel" initiated a sustained and successful effort to drive prices up beginning in mid-2003 and by 2008 potash prices had increased by 600%.
It is alleged that 5.3 million tons of potash were imported into the United States in 2008 alone.
The case, Minn-Chem Inc. et al v. Agrium Inc. et al, no. 10-1712 was argued in the 7th U.S. Circuit Court of Appeals.
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