HOUSTON (ICIS)--Saskatchewan officials on Wednesday said that they expect revenues in the next fiscal year from non-renewable resources, primarily potash and oil, to increase slightly despite forecasts that potash prices will fall further.
The province is the epicenter of Canada’s potash industry, with mines and facilities from the major producers being located in the area. While there has been renewed optimism for the long-term outlook for the crop nutrient, the market has been only recently showing signs of a recovery from last July’s breakup of the trading venture between Uralkali and the Belarusian Potash Company.
Finance Minister Ken Krawetz said that potash will draw an average price per tonne of Canadian dollars (C$) 273.93 ($244.58) in 2014 and C$275.72 in 2015, which is a sizeable decline from the average of C$345.27/tonne last year, according to the government’s estimates.
In February, the finance ministry announced that the government would withdraw $135m from its "rainy day fund" to offset a decline from non-renewable resources, as potash revenue was anticipated to decline by $71.9m from mid-year estimates while oil revenues were calculated to be down by $73.7m.
Potash royalties are one of the primary sources of revenue for Saskatchewan and are based on the price of the crop nutrient.
($1 = C$1.12)