Russia reaps rich harvest with potash

…As population growth drives demand for foodstuffs, and the arable land available to supply food shrinks, it is the mineral fertilizers that farmers use to cover the gap between consumer demand for calories and the productivity of farmland to supply it.

Thus the biggest consumers of potash are the hungriest – China and India, followed by Brazil; nature has not endowed them with the sub-soil resources of potash to meet their own requirements. But with just two syndicates in control of trade, and just three major importers, last year’s tussle over price between Russia and China was fierce.

…Two demand drivers lift the potash price in Asia. Food is one; fuel, that is to say biofuel, is the other.

As an agricultural fertilizer, the fundamentals for potash are unique. Nitrogen and phosphate are the other essential ingredients for plant growth, but both are produced from natural gas; they are abundant in supply; and because they depend on rising gas prices, profit margins for producers are being squeezed.

Asia Times Online