A squeeze on cash could limit the potash industry's ability to raise output in response to a jump in demand for the nutrient being fostered by the rebound in grain prices, Uralkali said.
The Russian potash giant forecast a "solid recovery" this year in world demand for potash this year, to be followed by "sustained demand in the long-term".
Prospects for the recovery, which will see potash demand near-double to 60m tonnes between 2009 and 2012, are being boosted by the jump in crop prices, which looked set to remain firm.
"Grain prices and operating rates are the main factors that will dictate how quickly pricing potential is restored for the potash industry," the group said.
"Since the beginning of the year, these indicators have been positive, and low stock-to-use ratios suggest that these factors are likely to improve further."
"Strong demand" for potash had already "encouraged" the Belorussian Potash Company, through which Uralkali markets its exports, to raise prices of nutrient to up to $420 a tonne from this month.
Uralkali received an average of $353 a tonne for potash shipments in the first half of 2010.
'New dynamics'
However, the ability of the potash mining industry to respond would be limited by troubles among smaller groups for raising cash.
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Ukralkali forecasts for sector potash demand, (year-on-year change)
Europe & former Soviet Union: 10.0m tonnes,(+79%)
China: 8.9m tonnes, +59%
North America: 8.7m tonnes, +142%
South East Asia and Oceania: 8.0m tonnes, (+142%)
Latin America: 8.0m tonnes, (+40%)
Middle East & Africa: 600,000 tonnes, (-25%)
Estimates for calendar 2010 |
"Greenfield projects being developed by junior companies could be cancelled due to difficulties in raising capital," Uralkali said.
The group also said that potential mergers and acquisitions in potash "could bring new dynamics to the industry".
Besides BHP Billiton's bid for Canada's PotashCorp, the world's top potash producer, Uralkali is also at the centre of speculation of a tie-up with Russian rival Silvinit.
Further details on Uralkali's thinking may be revealed later at a conference call to discuss first-half results which, in showing an 89% rise to 8.4bn roubles in earnings, beat analysts' forecasts.
Leading markets
Uralkali forecast North America, where potash demand showed particular decline in 2008-09, leading the revival in potash this year, with demand more than doubling to 8.7m tonnes.
China would remain the biggest single-country market, with demand of 8.9m tonnes, up 59%.
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