Arab Potash Company Q3 2011 Update

November 30, 2011

Rating: HOLD

Recent Developments and Highlights

The three quarters of year 2011 showed a promising increase in
sales for APOT, where the total quantity of potash sold was 1,694
thousand tons compared to 1,506 thousand tons for the same period
during year 2010, an increase of 12.5%. In addition the company
has signed several contracts and already covered 338 KMT in
contracts until the end of the year. Making the company close to
meet its estimated sales of more than 2 MMT this year.
Positive outlook for in the industry in Q42011 and 2012
Potash demand is estimated to substantially increase to reach 55-60
MMT in year 2011 and increase even further in year 2012, a
noticeable increase from 2009 level of 29 MMT. The utilization
rate of the industry capacity is increasing and expected to reach
around 96%. Several potash producers are currently initiating
expansion projects to meet the expected demand but most of them
will not be completed in year 2012 which supports the positive
outlook for next year.
Increasing potash prices and higher demand for crops
The current deliveries prices range around $460 per Ton, and are
expected to be maintained throughout the last quarter of this year.
Whilst, the Chinese deliveries prices for the first quarter of 2012
are expected to be around $530 per Ton, at the same time, the
Indian prices are expected to reach up to $600 per Ton during 2012

Feras Musmar
Senior Research Analyst
Awraq Investments
Firas.Musmar@awraq.com
Hazem Mraish
Research Analyst
Awraq Investments
Hmraish@awraq.com
Stock Data
Price

41.50

Fair Value
Market Cap (Mn)
52 Week High
52 Week Low
Bloomberg
Reuters
Free Float

44.45
3,697
51 JD
35 JD
APOT JR
APOT AMM
2.19%

* Price as of November 29, 2011

Figure1: Ownership Structure

While the outlook for the corn crop wasnt as promising year
beginning, but the last quarter witnessed an improvement, whereas
also the demand for vegetables, fruit and rice (which constitute
about 35% of potash application) is improving.

Libyan Arab
Foreign Inv.
4.06%

Iraqi Gov.
4.71%

Key Financial Highlights

# of Shares (million)
Stock Price (JD)
Revenues (JD m)
Earnings (JD m)
EPS (JD)
P/E
Sh. Equity (JD m)
BV per share (JD)
P/BV
Dividends (JD m)
Div. per Share (JD)
Dividend Yield

Kuwait Inv.
Authority
3.94%

2009

2010

83.3175
36.21
374
131.77
1.58
22.9
715.49
8.59
4.22
58.32
0.7
0.0193

83.3175
43.5
559
162.7
1.95
22.28
819.88
9.84
4.42
58.32
0.7
0.0161

2011 E
83.3175
42.12
715
275
3.30
12.76
910.3
10.92
3.86
58.32
0.7
0.0166

Pcs Jordan
Llc 27.96%

Islamic
Development
Bank 5.16%
Social
Security
5.17%

Free Float
2.19%

Arab Metals
Co. 19.92%

Jordan's
Ministry of
Finance
26.88%

Source: Securities Depository Center

Source: Arab Potash Company, Bloomberg, Awraq Investments

Awraq Investments

www.awraq.com Tel: 962 6 550 3803 Fax: 962 6 550 3801 Toll Free: 080022248

P.O. Box 925102 Amman 11110 Jordan

Arab Potash Company (APOT) Q3 2011 Update

November 29, 2011

Company Brief
Arab Potash Company (Ticker: APOT) is a Jordanian company with a capital of 83.318
million Jordanian Dinars, the company benefits from a 100 years concession from the
Jordanian Government allowing the company to exploit, manufacture and market the mineral
resources of the dead sea, the concession will last up until the year 2058. The company
focuses on the production of potash and currently holds a 3.6% share of the global market
share.
The company has completed the expansion of its factory during year 2010, now the company
operates under the capacity of 2.45 MMT annually, and is currently studying further
expansion through a project that is estimated to cost around JD 800 million to JD 1 billion
which is rumored to increase the capacity by 1 MMT annually.
Company Sales and Profitability
The sales of the company has witnessed a sharp increase in year 2010, even surpassing the
previous sales record of year 2008 that amounted to 1,89MMT to reach 2.08 MMT in year
2010. This can be attributed to the fact that consumption of grains was higher than production
which raised the price of grains and increased the demand for fertilizers, in addition to the
fact that application rates of fertilizers in years 2008 and 2009 were low and inventories were
limited, causing the demand for fertilizers to soar during the year 2010.
Figure 2: Quarterly Potash Sales (JD million)

JD million

Quarterly Potash Sales (JD million)

250
220
201 196

200

188
173
158
139

150
121

115

147

113
97

100
74
62

58

61

77
67

67

50

Source: Arab Potash Company

Sales revenue has improved during year 2010 reaching JD 559 million which is higher than
2009 revenues of JD374 million but still not as high as the record sales of year 2008 of JD
668 million due to lower selling prices in year 2010. Sales during the first three quarters of
year 2011 are picking up where total revenues amounted to JD 555 million. The net income
after tax for the three quarters of year 2011 amounted to JD 217 Million, an 84.8% increase
from net income of the same period during 2010 which was JD 117.5 million. The net profit
margin is around 39% which is higher than 2010 net margin of 29%.
Earnings per share reached JD 2.605 for the first three quarters of year 2011 compared to JD
1.410 during the first three quarters of year 2010.

Awraq Investments

www.awraq.com Tel: 962 6 550 3803 Fax: 962 6 550 3801 Toll Free: 080022248

P.O. Box 925102 Amman 11110 Jordan

Arab Potash Company (APOT) Q3 2011 Update

November 20, 2011

Figure 3: Consolidated Sales, Net Profit and Net Profit Margin

Consolidated Sales

Net Profit

Net Profit Margin

JD million

800

60%
52%

700

47%

50%

600

39%

40%

35%

500

28%

400
19%

300

30%

311
668

19%

559

555
217

14%
200
100

150
291
186

225
27

43

207

20%

163

374132

10%

39

0%

Source: Arab Potash Company

Utilization of capacity and cost of sales

The production in the first three quarters of year 2011 amounted to 1.674 MMT compared to
1.350 MMT for the same period during year 2010 and higher by %2.4 of the estimated
production plan. The company's utilization rate is expected to reach 90% of capacity, which
will be higher than the historical five year average of 85%. It is worth noting that the
company was able to achieve such high utilization rates in 2011, whilst increasing capacity to
2.45 MMT.
Cost of sales was around JD 154 per ton during the first three quarters of year 2011, which is
similar to year 2010 cost per ton and lowers than the JD 164 cost per ton for the year 2009
Figure 4: Cost of Sales

Figure 5: Quantity Produced Per Quarter

Cost of sales Per Ton

Quantity produced

180

163
154

155

160
140

153
115

120
86

100

73

80
60

45

600

500

453 467 453

474
424

501

592

570

542
488 485

561 577

535

466
400

400
314

109

83

52
71
61

40

144

700

300

62
47

142

Thousand Tons

Cost of sales / quantity produced

207
200

52

20

100
8

0
0

Source: Arab Potash Company

Source: Arab Potash Company

Page 3 of 14

Arab Potash Company (APOT) Q3 2011 Update

November 20, 2011

Company financing
The company maintained its dividend distribution policy, distributing JD 0.70 per share
during 2008, 2009 and 2010. The company plans to finance its future projects internally
which explains the higher retention in year 2010.The companys current capital structure is
24% debt 76% equity, the debt of the company has been decreasing during the last five years
were it decreased from JD 66 million in year 2007 to JD 26 million in Q32011.
Total assets and total equity in year 2010 and Q3 2011
Total assets reached JD 1.126 Million as of the End of the 3rd quarter of 2011 , up from JD
1,008 December 2010. Total equity increased from JD 819 million at the end of 2010 to reach
JD 933 million by the end of September 2011. In the first three quarters of year 2011 Arab
Potash Company had a positive operating cash flow of JD 219 million compared to the
operating cash flow during the same period in year 2010 which was JD 146 million. Total
change in cash flows from all activities amounted to JD 100 Million compared to the negative
cash flow of JD 12 million in same period in year 2010.
Figure 6: Average Potash Price and Sales Quantity
Sales Quantity (miilion tons)

$700
$600

588 575 594 589

2.08

2.05
1.94

530

1.86 1.89

1.81

467

1.64

$500
$400

379

$300
$200

135
106

$100
$0

406

433

371 366 370

339

443

192
175 178

439
409

499

254

1
0.63

0.98
0.43

Million Tons

Average Seling Price (US$)

0.51 0.48 0.48

0.51
0.35 0.31 0.37

0.58

0.51

0.61 0.58
1

0.16 0.16
0

Source: Arab Potash Company

Page 4 of 14

Arab Potash Company (APOT) Q3 2011 Update

November 20, 2011

Arab Potash Companys Stock Price

Arab Potash Companys stock price witnessed notable volatility during the first three months
of year 2011, ranging between 37.57 and JD 51.But during the period from April to
November the price became more stable trading between JD 37.50 and JD 45 and it closed on
JD 41.5 in November 29, 2011. The lowest closing price was JD 37.37 recorded on March 15,
2011. The company has free float of only 2.19%, which could be one of the factors that
attribute to the volatility of the stock.
As for the share prices of other potash producers internationally, all of the potash producers
(excluding Arab Potash Company) listed in the table below recorded their 52 weeks low at
the beginning of the fourth quarter , while all of companies recorded their 52 weeks high in
the first quarter of year 2011.
Figure 7: Stock Prices of Potash Producers 52 Weeks
52 Week Low

Date

52 Week High

Date

% Difference

Intrepid

USD22.47

10/4/2011

USD 40.22

2/14/2011

79%

Mosaic Company

USD 44.86

10/4/2011

USD 89.24

2/14/2011

99%

Potash Corp

USD 41.96

10/4/2011

USD 63.20

2/14/2011

51%

K+S

EUR 35.06

10/4/2011

EUR 58.85

2/15/2011

68%

Arab Potash Company

JOD 35.00

11/22/2010

JOD 51.00

1/19/2011

46%

Agrium Inc.

USD 63.93

10/4/2011

USD 98.02

2/14/2011

53%

Source: Bloomberg

As it can be noted from the table below, the stocks prices of most of the potash companies
were strongly correlated during the first three quarters of year 2011, except for ICL and Arab
Potash Company, several reasons can attribute to the lack of correlation including the
location of the company in the Middle East compared to the location of the other potash
producers and the low trading volume of the Arab Potash Company stock due to its low free
float percentage. Arab Potash Companys stock price was highly correlated to Potash Corps
stock price in the past but it started deviating since 2009 year beginning, as the following
table shows, APOT stock shows a correlation of only 0.13 to POTs stock in the first three
quarters of year 2011, which further strengthens the assumption that the two stocks are no
longer correlated.
Figure 8: Correlation Coefficient for Stock Prices of Potash Producers (January 2011 September 2011)
AGU US

APOT JR

ICL IT

IPI US

MOS US

POT US

SDF GR

AGU US

1.00

0.19

0.26

0.67

0.74

0.81

0.44

APOT JR

0.19

1.00

0.22

0.25

0.14

0.13

0.30

ICL IT

0.38

0.22

1.00

0.37

0.38

0.32

0.41

IPI US

0.76

0.25

0.37

1.00

0.83

0.72

0.47

MOS US

0.81

0.14

0.38

0.83

1.00

0.84

0.42

POT US

0.81

0.13

0.32

0.72

0.84

1.00

0.38

SDF GR

0.52

0.30

0.41

0.47

0.42

0.38

1.00

Assumptions: Stock prices included for all days of the year. Non trading days carried the previous closing price
Source: Bloomberg

Page 5 of 14

Arab Potash Company (APOT) Q3 2011 Update

November 20, 2011

Figure 9: Correlation Coefficient between APOT and POT Stock Price

Correlation APOT, POT Stock

Price

2005

2006

2007

2008

2009

2010

Up to September
2011

0.26

-0.35

0.90

0.87

0.20

0.18

0.13

Source: Bloomberg

During the first nine months (of 2011) the APOT stock price has reported a correlation of
0.47 with the Amman Stock Exchange Free Float Index. The stock is considered to be stable
compared to other potash producers worldwide and has maintained its strength throughout the
last six months.
Figure 10: Arab Potash Companys Stock Price vs. Amman Stock Exchange Free Float Index

ASE General Free Float & Banks Indices

General Index

APOT Stock Price

6000

JOD 120

5000

JOD 100

4000

JOD 80

3000

JOD 60

2000

JOD 40

1000

JOD 20

JOD 0

Source: Bloomberg

Page 6 of 14

Arab Potash Company (APOT) Q3 2011 Update

November 20, 2011

Valuation
The current demand for potash is increasing and companies are expanding their capacities to
match the anticipated demand, the main concerns faced by the company are possible future
economic downturns which will affect the demand for grains, over supply starting from year
2014 due to all expansion projects of the potash producers, and the situation of crops
production and consumption. While the factors that support the positive outlook are the
current strong situation of the agriculture sector, potash having no real substitute, the
expected increase in demand for the bio-fuel in the future, and the high barriers of entry.
This valuation is based on the Discounted Cash Flow model. Potash prices and sales volumes
are prime variables affecting the companys future cash flow. The current selling price of JD
331 ($467) per MMT is expected to be maintained in during the fourth quarter of year 2011.
Due to the fact that usually the selling prices of Arab Potash lag the spot prices we estimated
a lower selling price than the expected JD 376 ($530) for china and JD 425 ($600) for India
in the first quarter of 2012 for other potash producers, We assumed JD 354 ($500) for 2012;
JD 379 ($535) for 2013, JD 405 ($571) for the remaining forecasted period. Estimated
Earnings per Share are JD 3.30 per share in 2011 and JD 3.78 in year 2012. We assumed that
demand for potash will keep its current momentum and the company will be able to increase
its sales volume from 1.8 MMT in 2010 to 2.16 MMT in year 2011 and then to reach on
average 2.27 MMT annually for the remaining forecasted period.
Figure 11: Actual and Projected Earnings per Share
Earnings Per Share
5
4.39

4.5

4.39

4.08
3.78

3.74

3.30

3.5
3
2.5
1.8

1.95
1.58

1.5
1

0.52

0.47

0.5
0

Source: Arab Potash Company (Actual), Awraq Investments (Estimates)

We applied a risk free rate of 5.16%, and market return of 11%. Using Beta of 1.09, the cost
of equity is 11.50%. With 76% weight of equity, 24% weight of debt; and 7.18% before tax
cost of debt, the Weighted Average Cost of Capital (WACC) is 10.24%. The tax rate is 14%
as of 2010 according to Arab Potash Company. Based on these assumptions, the DCF method
yielded JD 44.45 per share.
The discounted cash flows (using FCFE) yielded a fair value of JD 44.45 per share for Arab
Potash Company. The sensitivity analysis in Figure 12 provides the results of the weighted
valuation using different assumptions for estimated revenues. Figure 13 illustrates the
sensitivity of value to changes in Cost of Equity and the terminal growth rate.

Page 7 of 14

Arab Potash Company (APOT) Q3 2011 Update

November 20, 2011

Figure 12: Value Sensitivity to Changes in Revenues

% Change in estimated revenues
Fair Value

-15%

-10%

-5%

0%

5%

10%

15%

36.50

39.15

41.80

44.45

47.10

49.76

52.41

Source: Awraq Investments

Figure 13: Sensitivity of Weighted Valuation to Changes in Ke and WACC

Change in Ke
Sensitivity Analysis

10.50%
2.50%

Terminal Growth Rate (G)

11.00%
11.50%
12.00%
12.50%
Change in Weighted Valuation

13.00%

3.00%

48.03
50.36

45.22
47.23

42.71
44.45

40.47
42.01

38.46
39.81

36.63
37.84

3.50%

53.01

49.50

46.44

43.73

41.32

39.17

*Source: Awraq Investments

The outlook for potash prices and demand in the coming years are uncertain, although the
current situation of the industry is promising, the expected increase in supply once the
expansion projects for factories internationally might oversupply the industry. Current stock
recommendation is HOLD based on our estimated fair value for the stock price which is JD
44.45, which is 7% higher than the stock price on November 29, 2011 that closed at JD 41.5.
Peer Multiples
For peer analysis we have considered the following potash producers: Potash Corp (POT),
The Mosaic Company (MOS), Israel Chemicals (ICL), Agrium (AGU), and K+S. The
average P/E multiple for peer companies was 11.43 times on November 20, 2011, which is
very close to the estimated P/E for APOT which is 12.76. As for the Price to Book, the
average P/BV for the considered peers is 3.28 which is also slightly lower than the estimated
P/BV for APOT which is 3.86. On November 20, 2011 APOT had the highest P/E multiple
at 13.03 times which is very similar to Potash Corps P/E of 12.93. While APOTs P/BV was
came in third place at 3.66 times compared to Potash Corps P/BV of 4.96 times and Israel
Chemicals P/BV of 4.56 times.

Page 8 of 14

Arab Potash Company (APOT) Q3 2011 Update

November 20, 2011

Potash Industry Overview

The potash industry is a consolidated industry where 80% of the global supply is dominated
by eight companies. Most of the potash supply is coming from Canada, Russia and Belarus.
The barriers to entry to the industry are high which is preventing new companies from
entering the industry.
The potash industry witnessed a strong downturn in year 2009 although the selling prices
stayed around $495 average but sales dropped due to the drop in the price of crops and the
low application rates for fertilizers which affected the demand of potash around the world, but
the industry has well recovered during year 2010 and the first half of year 2011 although it
still has not returned to its record high that was set in year 2008.
The drop in the application of fertilizers during years 2008 and 2009 was the main reason for
the low demand for potash during those years, however in year 2010 the global economies
started to recover which positively affected the agricultural sector and there was a surge in the
demand for fertilizers, which consequently caused an increase in global demand for potash.
About Potash
Potash is one of the three primary plant nutrients (the other two being fixed nitrogen and
soluble phosphorus). While the most used nutrient Nitrogen is produced using industrial
processes, both potash and phosphate are mined products. There are no real substitutes for
potash, where the closest substitute is animal manure and other low-potassium-content
substitutes, which are not as effective as potash and can only be profitable if transported in
short distances to crop fields.
Potash Demand
The main demand drivers for potash are population growth, decrease in arable lands, meat
consumption, demand for bio-fuels, and increase in demand for commercial crops such as
corn, rice and soybeans.
Potash shipments in year 2010 were a little over 50 million tons while consumption was over
51 million tons. The demand is expected to increase to reach 57.5 to 60 million tons in year
2011 and eventually reach 65-70 MMT by year 2015.
Figure 14: Potash Demand compared to Operational Capability
Demand

Total Operational Capability

70
Million Tonnes KCI
60
50
40
30

20
10
0

Source: Potash Corp

Page 9 of 14

Arab Potash Company (APOT) Q3 2011 Update

November 20, 2011

Also it should be noted that the US policy regarding the bio-fuel is an important driver for
marginal demand for potash. If fuel prices maintain their uptrend, the urge for bio-fuel
production could actually push the prices of grains higher. In year 2010 about 28.7% of all
US grain crops were used for bio-fuel, which is about 120 million tons of 400 million tons
that were planted during that year. The US is mainly focusing on Corn bio-fuel while Brazil
is focusing on sugarcane bio-fuel. However, due to the currently limited usage of bio- fuel it
is expected that the effect on potash demand will be more evident in the long run.
The following figures illustrate the consumption for Grains, Oilseeds, Fruits and Vegetables.
As it can be noted from the figures below the world crop consumption is growing steadily
due to the constant population growth, which is mostly effecting the demand for fruits and
vegetables which constitutes 22% of potash fertilizer uses.
Figure 15: World Crop Consumption
Grains
12

Oilseeds

Figure 16: Agriculture Commodity Prices

Fruits & Vegetables

Cotton
Sugar

Billion Tonnes

10

Coffee

Palm Oil

Corn
Soybean

Rice

Wheat
0
1970

1980

1990

2000

2010

2020F

50

100

150

200

Source: World Bank

Source: USDA, FAO, Potash Corp

Potash Supply
As a response to the expected increase in demand, potash producers have either initiated or
planning to initiate projects for expansion of their factories, which according to the
international fertilizers association (IFA) might lead to oversupply in either year 2014 or
2015 if all expansion projects are completed according to their current scheduled time line.
About 30 potash-related expansion projects are planned which will add around 34% to the
current supply, making the capacity for 2014 to be around 74 MMT, which could be growing
in faster rate than the demand
Figure 17: Potash Expected Supply and Shipments
Historical
Operational
Capability
Expected
Operational
Capability
Historical
Shipments
Expected
Shipments

80

Million Tonnes KCI

70
60
50
40
30
20
10
0

Source: Public filings, Potash Corp

Page 10 of 14

Arab Potash Company (APOT) Q3 2011 Update

November 20, 2011

Potash uses
Potash helps plants develop strong root systems and retain water, contributing to higher
yields and greater resistance to drought, disease and insects. It also improves the taste and
nutritional value of food, and, in animals, helps growth, maintenance and milk production. In
the US, more than 45 percent of potash is applied to corn. In China, fruits and vegetables
consume half of the potash applied, with rice taking a further 28 percent. In Brazil, almost 75
percent of the potash is used to produce soybean, sugar cane and corn. In Malaysia and
Indonesia, oil palm accounts for more than 70 percent of potash consumed. The fact that the
potash is applied on a diversified range of corps makes it less vulnerable to low application
rates on one type. As the following figure shows, 22% of the potash application is for fruits
and vegetables, while 14% is for corn and 13% for Rice.
Figure 18: Potash Prices versus other Fertilizers
Type
Percentage

Corn
14%

14%
13%
6%
8%
9%
5%
22%
23%

Corn
Rice
Wheat
Soybeans
Sugar Crops
Palm Oil
Fruits and Vegetables
All other crops

Rice

23%
Wheat
13%

Soybeans
Sugar Crops

6%
22%

Palm Oil
8%
5%

Fruits and Vegetables

9%

All other crops

Source: MAG Industries

Other non-fertilizer uses of potash include water treatment, soap making, textiles and several
other processes. Although potash is used mainly as a fertilizer other non-fertilizer uses has
been increasing, for an example 15% of the potash consumption in the US is for non fertilizer
uses. While the global consumption of potash for non fertilizers uses is around 5%.
Potash Prices versus other Fertilizers
Although Potash is currently the third most used fertilizer, the demand for it is expected to
increase by a higher percentage than other fertilizers, the following figure illustrates the
estimated growth rates for the three primary fertilizers.
Figure 19: World Fertilizer Consumption Growth (2011F Percent)

Potash

Phosphate

Nitrogen

Source: IFA

Currently China makes potash purchases through a global contracting process with the main
global suppliers. Historically, this has been an annual - and then semi-annual - process. Prices
Page 11 of 14

Arab Potash Company (APOT) Q3 2011 Update

November 20, 2011

to Chinese buyers now sit at US470 per ton. But it is expected that this price will move
significantly higher in 2012. The reasons are: one, the most recent price to India of US530
ton likely presages a similar move for shipments to China; two, global pricing momentum has
the potential to hike what China and India are paying to $US600 ton next year and beyond.
The first quarter of 2012 potash deliveries are expected to be priced around $530 MMT, the
2012 market is expected to be tight due to the incompletion of expansion projects and
limitations on productions, while in year 2015 the supply will have greatly increased while
the demand might have decreased or not increased as the supply, china is expected to be %75
potash independent in year 2015.
Fertilizers prices have not achieved the peak prices of year 2008, but the prices of fertilizers
are picking up in year 2011 (except for Urea which remained stable around 2009 levels),
what also can be noted from the graphs is that potash tends to have different trends that other
fertilizers.
Figure 20: Potash Prices versus other Fertilizers
1200

Middle East Muriate Of Potash (MOP) - FOB

Africa Trisodium Phosphate - FOB

1000

Arabian Gulf Urea - FOB

800

Arabian Gulf Ammonia - FOB

600

400

200

Source: Bloomberg

The prices of potash were higher than other fertilizers only during year 2009, after that the
prices of other fertilizers regained and returned to be higher than potash prices (again, except
of Urea which remained stable and lower than potash prices).
Figure 21: Fertilizer Prices/ Potash Price
6.00
5.00
4.00
3.00

Africa Trisodium Phosphate - FOB / Middle East

Muriate Of Potash (MOP) - FOB
Arabian Gulf Urea - FOB / Middle East Muriate
Of Potash (MOP) - FOB

2.00
1.00
0.00

Source: Bloomberg

Page 12 of 14

Arab Potash Company (APOT) Q3 2011 Update

November 20, 2011

Ratio of Fertilizer Prices to Potassium Chloride Prices

The following figure provides a comparison of fertilizer prices compared to Potassium
Chloride. Potassium chloride was lower than other fertilizers since 1995, except for Nitrogen.
Ammonium nitrate and sulfate of ammonium were lower than potassium chloride in 2008.
While in year 2011 only phosphate and Anhydrous ammonia are price higher than Potassium
Chloride.
Figure 22: Average U.S. Farm Prices of selected fertilizers Divided by Price of Potassium Chloride
Year

Month

Anhydrous
ammonia

Nitrogen
solutions
(30%)

Urea
44-46%
nitrogen

Ammonium
nitrate

Sulfate of
ammonium

Super-phosphate 4446% phosphate

Diammonium
phosphate (1846-0)

Potassium
chloride 60%
potassium

1995

Apr.

2.13

1.09

1.72

1.44

1.17

1.51

1.70

1.00

1996

Apr.

1.98

1.19

1.82

1.52

1.20

1.69

1.92

1.00

1997

Apr.

1.99

1.05

1.69

1.49

1.22

1.69

1.79

1.00

1998

Apr.

1.55

0.82

1.20

1.18

1.15

1.55

1.62

1.00

1999

Apr.

1.26

0.76

1.05

1.08

1.02

1.52

1.57

1.00

2000

Apr.

1.38

0.79

1.21

1.18

1.01

1.41

1.45

1.00

2001

Apr.

2.35

1.11

1.65

1.53

1.13

1.39

1.44

1.00

2002

Apr.

1.52

0.77

1.16

1.19

1.14

1.35

1.38

1.00

2003

Apr.

2.26

0.98

1.58

1.47

1.18

1.47

1.52

1.00

2004

Apr.

2.09

0.98

1.52

1.45

1.13

1.47

1.52

1.00

2005

Apr.

1.70

0.88

1.36

1.19

1.00

1.22

1.24

1.00

2006

Apr.

1.91

0.85

1.33

1.34

0.97

1.19

1.23

1.00

2007

Apr.

1.87

0.99

1.62

1.36

1.03

1.49

1.58

1.00

2008

Apr.

1.35

0.71

0.98

0.91

0.70

1.43

1.52

1.00

2009

Mar.

0.80

0.38

0.57

0.51

0.44

0.75

0.75

1.00

2010

Mar.

0.98

0.55

0.88

0.78

0.64

0.99

0.99

1.00

2011
Mar.
Source: USDA

1.25

0.58

0.88

0.8

0.7

1.05

1.17

Page 13 of 14

Arab Potash Company (APOT) Q3 2011 Update

November 20, 2011

Disclaimer
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Page 14 of 14