RE:Love it.....so much upside in MBAC Fertilizer Interesting article that helps shed some light on how we got to where we are today. Of particular interest is how the company thought they would originally get US$300 per tonne for their SSP but could only get US$200 – however, the future looks brighter. According to the article, Vale, the largest domestic supplier jacked up prices to over $300 per tonne in 2013 which prompted a flood of cheap Chinese SSP import and then resulted in Vale dumping its excess causing prices to plummet to US$150 and the depressed prices carried over to 2014. It should be a very different story in 2015. Presently, Chinese SSP averages US$140 per tonne (go to AliBaba, SSP). The article says it costs $60/tonne (has “ton” but I believe we are discussing metric “tonnes”) to ship from China to Brazil, $50/tonne to truck ~1000 km from port to field and port fees are $40/tonne for a total cost of US$290/tonne. Although the article was written just this past September, I think we need to modify some numbers based on rapidly changing metrics. Considering the drop in energy prices, let’s cut the shipping and trucking fees in half to $30/tonne and $25/tonne respectively. I also questioned the port fees but found that it could include several different taxes (e.g. Merchant Marine Renewal Tax, Import Tax, Industrialized Products Tax, Merchandise and Services Circulation Tax, Contribution to Social Integration Program, Contribution to Social Security Financing) and so left it as is. However, at the same time we need to account for the dropping currency – the Brazilian Real just hit a 9 year low relative to the US dollar – so let’s add back $20 to account for the last year’s depreciation against the US dollar. The new figure comes out to be US$255 per tonne SSP. That is a reasonable estimate to bring in the “cheap” Chinese SSP for 2015 but we should be able to fetch a slight premium to this as explained. According to the article the quality of the Chinese SSP had degraded by the time it reached the farmers which makes sense as most fertilizers are hygroscopic (i.e. absorb moisture) and the granular particles apparently turned to paste upon arrival. If we tack on just 5% for our premium product which has already been recognized for its quality, we are now approaching US$270.00 per tonne. Now do your cash flow numbers for 2015. There is value here. Greg