World Potash Outlook. William J. Doyle - President and CEO, PotashCorp

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1 World Potash Outlook William J. Doyle - President and CEO, PotashCorp 53rd Annual Meeting The Fertilizer Industry Round Table Winston-Salem NC Oct 27-29, 29, 23

2 Potash is an Essential Nutrient North America (2) West Europe (19) Central Europe (8) FSU (15) Middle East (11) Asia (29) Latin America (35) Africa (4) Oceania (6) Relative Size of Consumption (number of countries) Source: Fertecon Potash has Limited Economical Reserves North America (2) - Canada - US Europe (3) - UK - Germany - Spain FSU (2) - Belarus - Russia Middle East (2) - Israel - Jordan China Brazil Chile Relative Size of Production (number of countries ) Source: Fertecon

3 Rationalization and Consolidation in Canada Capacity - Million Tonnes KCl Cominco CCP Kalium IMC Potacan PCA SaskTerra PotashCorp Agrium IMC Global PotashCorp Source: Fertecon, NRCanada and PotashCorp Rationalization and Consolidation in the US 2.5 Capacity - Million Tonnes KCl Amax/Horizon (closed) Lundberg/Eddy (Closed) New Mexico Miss Potash.5. Miss Potash IMC IMC Source: Fertecon, NRCanada & PotashCorp

4 Rationalization and Consolidation in Europe 16 Capacity - Million Tonnes KCl 12 8 SCPA (France) (closed) Ercos (Spain) Coposa INI (Spain) Cleveland (UK) WGR DSW (Israel) 4 GDR K&S (Germany) Source: Fertecon, NRCanada & PotashCorp Rationalization in the FSU Capacity - Million Tonnes KCl Sylvinit Uralkali 6 4 Belaruskali Source: Fertecon, NRCanada & PotashCorp

5 World Potash Supply/Demand Balance 4 35 Million Tonnes K 2 Demand Surplus Capacity Rationalization and Consolidation Source: Fertecon, NRCanada, IFA & PotashCorp Industry Structure - Ownership Type Non-government Ownership % 23 Government Ownership 66% 19% Government Ownership 81% Publicly Traded or Jointly Held Stock Companies Source: PotashCorp

6 US Annual Trade Deficit 6 Billion US$ Source: IMF Selected Foreign Exchange Rates % Change from January to October 23 Percent No Change Canada UK Euro Brazil Japan India Australia China Source: X-rates.comX

7 2/23/24 US vs Brazil - Soybean Production Costs US$/Acre US Corn Belt Real/US$ Brazil Avg Brazil Late 2 Oct Brazil Late 3 Present 2.7 Source: Andre S.M. Pessoa Agroconsult and Marcos S. Jank University University of Sao Paulo, PotashCorp Global Meat Consumption 7

8 World Grain Production and Consumption Wheat and Coarse Grains Billion Tonnes Production Consumption Production Gap /8 1982/ / / / / /98 2/1 23/4F Source: USDA World Wheat Stocks US, China and ROW 12 Million Tonnes China's Imports US China ROW /68 71/72 75/76 79/8 83/84 87/88 91/92 95/96 99/ 3/4F Source: USDA

9 World Corn Stocks US, China and ROW Million Tonnes 15 China's Exports US China ROW /68 71/72 75/76 79/8 83/84 87/88 91/92 95/96 99/ 3/4F Source: USDA World Grain Stocks Wheat and Coarse Grains 6 Million Tonnes Year-End Grain Stocks Stocks-to-Use Ratio Percent /76 79/8 83/84 87/88 91/92 95/96 99/ 3/4F Source: USDA

10 US Soil Potassium is Low Developing Nations Potential Potash Growth Million Tonnes KCl 14 China 14 India 14 Brazil Current Potential Current Potential Current Potential Source: PPI-PPIC PPIC

11 Potash Cost-Price Squeeze Labor Cost Index Cost/Price Index Labor Cost Index Potash Price Index Source: Green Markets, PotashCorp Potash Cost-Price Squeeze Natural Gas Cost Index Cost/Price Index Natural Gas Cost Index 15 Potash Price Index Source: Green Markets, PotashCorp

12 Potash Cost-Price Squeeze Tax Cost Index Cost/Price Index Tax Cost Index Potash Price Index Source: Green Markets, PotashCorp Russian Potash Costs are Increasing Gas prices to rise to market values Electricity costs also increasing Labor costs under pressure Rail costs up sharply Terminal costs being boosted

13 Canadian/US Dollar Exchange Rate 1.6 Cdn$ per 1US$ % Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Source: X-rates.comX World Potash Trade is Large 5 Million Tonnes Potash Product % of Potash production is exported Production Exports Source: Fertecon

14 Ocean Freight Cost Index 2 Index 96% Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Source: BHI - Baltic HandyMax Ocean Freight Index EU Growth to Alter World Trade More German Production to Stay Closer to Home, Offshore Exports to Markets Outside Europe Could Decline FSU Producers May Have to Look Further Abroad if the Doors Are Closed on Exports to Former East European Markets

15 Demand to Outstrip New Potash Capacity Cumulative Growth Million Tonnes KCl Jordan Brazil Germany China Spain Israel Canada Demand June Source: Fertecon, PotashCorp Food Comes from the Land

16 Fertile Minds Facts Fertilizers are drawn from nature - they are not man- made Farmers are not adding fertilizers to the ground. They are replacing nutrients that are lost at each harvest. The world has no choice but to use fertilizers. Without them, 2 billion people would starve. Fertilizers are responsible for the greatest land conservation achievement in human history, making recreational land and wildlife habitats possible. Farmers are the best-qualified environmentalists Fertile Minds

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