The defendants have deep pockets. This may not be settled/dismissed all that soon.
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Potash Corp., Fertilizer Makers Sued for Price-Fixing Scheme
By Christopher Donville and Andrew Harris
Sept. 12 (Bloomberg) -- Potash Corp. of Saskatchewan Inc., the world's biggest producer of the potassium-based fertilizer, and other companies were sued in federal courts in Chicago and Minneapolis for conspiring to fix prices.
The companies, operating in Canada, the U.S., Russia and Belarus, allocated market shares and sales volumes to keep potash prices artificially high, Gage's Fertilizer & Grain Inc. said in its complaint
filed yesterday in Chicago. Gage's lawsuit seeks class-action, or group, status.
``Potash suppliers repeatedly attributed dramatic price increases to a `tight supply/demand balance' when in fact a number of defendants had excess potash capacity,'
' Gage's Fertilizer said in the complaint. ``These statements were a pretext to conceal defendants' conspiracy to restrict supply and fix prices of potash.''The allegations come as JPMorgan & Chase Co. analyst David Silver said potash makers would benefit from greater demand as farmers seek more of the fertilizer to increase yields.
The U.S. Department of Agriculture today said corn and soybean crops in the U.S. will be smaller than expected, boosting the price of both commodities.
``The declines in projected corn and soybean production point to continued strong grain fundamentals,'' Silver said today in a note to clients. ``All things equal, a smaller global harvest translates into tighter grain supplies, higher crop prices, and stronger demand for fertilizer next year.''
Gage's and the Minneapolis plaintiff, Minn-Chem Inc. of Sanborn, Minnesota, are seeking unspecified damages and court orders barring the price-fixing they claim is illegal under U.S. law
Also named as defendants in the action are Calgary-based Agrium Inc., Cargill Inc.'s Mosaic Co. and Mosaic Crop Nutrition LLC units, as well as Russian and Belarusian companies.
``We do not believe the claims have basis,'' Agrium spokesman Richard Downey said today by telephone from Calgary.
The allegations are without merit, Sheryl Nagel, a spokeswoman for Plymouth, Minnesota-based Mosaic, said today in an e-mailed statement.
``The fundamental drivers of fertilizer prices continue to be accelerating global nutrient demand due to world population growth, improved diets and the demand for protein, along with increased demand for biofuels,'' Nagel said.
Bill Johnson, a spokesman for Saskatoon, Saskatchewan-based Potash Corp., declined to comment.
The cases are Gage's Fertilizer & Grain Inc. v. Agrium Inc., 08cv5192, in the Northern District of Illinois, and Minn-Chem Inc. v. Agrium Inc., in the District of Minnesota (Minneapolis).
To contact the reporters on this story: Christopher Donville in Vancouver at [email protected]
; Andrew Harris at the federal court in Chicago at [email protected]
Last Updated: September 12, 2008 14:01 EDT