Question-and-Answer Session
Operator
(Operator Instructions) And your first question comes from the line of David Silver of JP Morgan. Please proceed.
David Silver – J. P. Morgan
Yeah, hi, good morning. Jim, I had a question about potash pricing and in particular I was looking at slide four in your presentation where you seem to kind of point to delivered prices into Brazil of $350 or more beginning in the middle of ’07. I’m trying to relate that market price or market dynamic to the seemingly much lower guidance of $190 to $200 FOB the mine for shipments, I guess, to take you through February of 2008. Is there something company specific or is there some meaningful time lags? Can you discuss maybe why seemingly you’re indicating your potash prices, realized prices are going to lag what you have as some benchmark market prices by such a wide margin?
James T. Prokopanko
Sure, David. This is an issue we’ve addressed and continue to explain. As a sale today typically doesn’t get shipped for about 12 weeks, something in that range. Anywhere 8 to 16 weeks later before it shows up as a sale on a revenue on our books. So what we’re posting today and for the next couple weeks are products that we sold back in would be October/November time period. At that time prices weren’t at where they are today. So it’s just a matter of some catch up before we get to those kind of spot levels you see posted today.
Lawrence W. Stranghoener
David, I’d add, note too that we have a mix of products we sell in potash, including industrial products and K-mag – a specialty product – that are currently priced below agricultural market prices.
David Silver – J. P. Morgan
Okay. And if I could ask a question about sulphur. The markets both in the Gulf and offshore are pretty volatile right now. And this is probably an issue of increasing importance for you guys. I’m just wondering if you could characterize not just the price but maybe your feelings about the availability of sulphur sufficient to kind of maintain running your DAP operations at the rates that you indicate. In other words, is there any risk that maybe some middle man will get a sharp idea of taking some $250 a tonne sulphur from the Gulf and shipping it into some offshore markets where the selling prices are much higher.
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