Canada’s potash reserves are world famous, but their role in the decline of the country’s economic growth is nothing to brag about. Few realize just how big a part of Canada’s economy the Saskatchewan potash industry really is.
Revitalized North American phosphate fertilizer demand has driven fertilizer company profits higher in the first quarter of 2012 despite higher production costs and lower fertilizer prices.
Rising food costs and under-utilized farm resources have led China to give phosphate a greater strategic role. Focused on developing domestic supply, local governments are reducing the number of domestic operators while building bigger firms.
The first US mad cow disease case in six years years has spooked the potash-reliant corn and grain market, while US soybean prices hit four-year highs on news of South American drought damage reports.
Western Potash began its search for a strategic partner this month while North American potash inventories grew in anticipation of increased demand from domestic and international buyers.
As agricultural data continues to stream in, phosphate market participants are attempting to readjust predictions leading into the spring planting season.
Recent contract renewals have given potash markets positive cues for a stronger than expected 2012. Long-term investment into potash infrastructure will help keep markets well supplied.
With advancing technology and booming world demand, phosphate production is heading offshore and into deep water.
Despite recent concerns around the health of the Chinese economy, recent potash contracts from China have given hope for investors banking on rising food and crop prices.
Despite the risks associated with mining in Africa, potash companies are looking to bring big projects into production in a region where hunger is constant.
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