Potash Profits Boosted by Rising Demand
Source: Potash Investing News, Leia Michele Toovey (5/13/10)
"The underlying structure of the potash market is changing. . ."
For the future, the world's population growth will be centered in developing countries, where crowded conditions and limited arable land will put extra pressure on the local resources. India, China and Brazil are new world leaders in terms of the future potash market. During 2009, China was one of the first countries to see a decline in potash consumption on the back of record high prices in 2008. India, conversely, continued to purchase potash, becoming the largest consumer in 2009. India's potash purchases were virtually unaffected by the financial crisis due to a government subsidy on fertilizers.
The sector will get an unexpected boost from Canada, as a mild spring has led the country to plant a record crop of nutrient needy canola.
Russia's anti-monopoly agency (FAS) said last month it would support proposals to impose an 8.5% export duty on potash due to rising pricing on the domestic market. Russian potash miner Uralkali's President Denis Morozov said such a tariff would seriously affect his company's ability to compete in the global market. The FAS added that a final decision would be taken by a commission of first deputy Prime Minister Igor Shuvalov.