Fertilizer Drives the Potash Industry
Potash stocks remained
relatively stable from 1980 until the early 2000's due to relatively stabilized
supply and demand. Recent shifts in agricultural demands and improvements to
global economies have led to increases in the demand for fertilizer all over
the world. Potash is one of three central ingredients that make up fertilizer
and as such, its demand has greatly increased as well. High demand and limited
supplies of potash have caused potash stocks to climb steadily since the early
2000's with the growth expected to be sustained.
Currently upwards of 95% of the world's production of potash
is used in the fertilizer industry. This figure is expected to stay very high
as the world population continues to grow at a steady rate. Fertilizer has
consistently shown to be imperative to growing stronger, better tasting and
plentiful crops that are resistant to extreme weather. Potash can literally
mean the difference between feast and famine for countries that have small
amounts of agricultural lands, are prone to drought or cold weather.
The Influence from China
China has been instrumental in
regards to potash stock prices with a large percentage of the world's
population living there and limited space for crops. China is the global leader
in production of red meat as well and the crops grown there are required to
feed livestock as well as the population. China is the world's largest importer
of potash, most of which originates from Canadian potash mines since Canada is
the biggest global exporter of potash.
The sheer amount of potash that China is expected to require
can lead to significant shifts in potash stock prices as they have the ability
to singlehandedly cause noticeable shifts in the global supply and demand of
potash. Significant improvements in China's economy have directly led to higher
numbers of potash imports along with extreme weather making fertilizer more
important than ever.
A Bright Future for Potash Stocks
The fertilizer industry is
considered a bull market and potash investing is considered one of the safest
investments available. The agricultural lands available are diminishing and
there will continue to be an emphasis on growing the highest quality crops
possible in the limited space available. Fertilizer will continue to be an
important staple for countries all over the world as populations continue to
grow. Demand for the following crops is projected to grow significantly in the
future:
The need for corn is expected to
grow especially quickly as corn-based fuels such as ethanol become more
accepted and widespread.
Canadian
Potash companies are great investment opportunities with western Canadian
potash mines producing most of the world's potash. Some Canadian potash
production companies have begun expanding operations to new areas around the
world such as Africa and are attracting interest from investors worldwide. Ethiopia
specifically has many shallow potash deposits that are large in size. Canadian
potash companies are expected to meet the increased global