Potash prices head for 20 pct drop after cartel disintegrates
* Producers scramble to sell after BPC breakup
* Prices in Brazil, a key spot market, fall to $370 a tonne
* Belaruskali offers India deep discount on new contracts
By Ron Bousso
LONDON, Sept 5 (Reuters) - Potash prices are poised to drop some 20 percent after the surprise breakup of the world's largest producer cartel sent buyers and sellers scrambling to establish new valuations, traders said.
Global trade in the material - one of three nutrients vital for agriculture - remains largely on ice after Russia's Uralkali in July quit the partnership Belarusian Potash Co (BPC), which together with a rival North American cartel controlled some 70 percent of the market.
Belarus' retaliatory arrest of Uralkali's chief executive Vladislav Baumgertner in Minsk last week further highlighted the deep rift between the Russian and Belarusian producers.
"As a cartel, producers were able to cut supplies in order to control prices. As competitors, producers will reduce prices rapidly to gain business," an industry source said.
BPC co-founder Belaruskali appears to be particularly keen to secure new supply deals after the split left it with limited global trading infrastructure, which had been dominated by its Russian partner, traders and industry sources said. Continued...