At between US$350 and US$400, Morocco-based OCP Group’s second quarter prices for phosphate rock, which is used to manufacture fertilizers and chemicals, are roughly US$150 to US$200 higher than they were in the first quarter of 2008, according to Fai Lee at RBC Capital Markets.

This will mean higher production costs for non-integrated phosphate fertilizer producers, which could drive prices even higher than current record levels, the analyst told clients in a note.

One company that stands to benefit is Potash Corp., because unlike non-integrated producers, it has access to low-cost, high quality phosphate rock, Mr. Lee said.

He maintained an “outperform” rating and US$195 price target on Potash shares, which represents upside of more than 20%.