Potassium: market outlook

What is potassium and how much does it cost?

In brief: Potassium is a gray horse world agricultural market. The potassium prices rise from year to year.

What is potassium and what is it for? Potassium – is one of 3 major fertilizers used mainly in agriculture. Mineral retains moisture in the soil, improves the nutritional value, improves the taste and color of products. It is widely used in the cultivation of wheat, rice, sugar, soybeans, fruits and vegetables and other crops.

According to FAO, the consumption of meat, dairy products, grains, oilseeds, fruits and vegetables for the past 50 years has increased by 3 times. This trend is likely to continue. Developing countries, in particular the BRIC, showed healthy economic growth over the past decade. People in these countries have to spend more on food, diet becomes more diverse, and consumers – are more demanding. The growth of world population and no need to talk… Under these conditions, the main problem for farmers – this is to satisfy the growing demand for products on the background of declining arable land per person. Extensive growth has become expensive, so to maintain the necessary level of harvest must fertilize the soil. Projected that fertilizer consumption will increase by one third by 2020. Who’s Who in the world market of potassium? The market has developed an oligopoly, with “legal” barriers to entry. The main exporters of potassium is the North American Canpotex (together Potash Corporation of Saskatchewan, Mosaic Company, and Agrium) and the Russian UralKali. About a year ago, Brazil reported that discovered the third-largest reserves of potassium. Nevertheless, the development of the mine goes up to 7 years and invest billions of dollars needed. Until about 2017-2018 years. current supply of goods is likely to continue, provided that the manufacturers do not open new mines and increase power. The consumption of potassium is concentrated in Europe, U.S., Asia and Latin America. At the same time there has been a trend shift of consumption from developed to developing countries.

Pricing – Annual saga about the price of potash. Since the sellers prices are controlled mainly by two companies – Canpotex and Uralkali. In the pre-crisis times, against a background of rapid demand for potash producers have the luxury of setting prices: from less than $ 300 per ton in 2007 prices just a year soared to $ 1000. Brazil, India and China, as large customers have expressed their wishes every year over the price. In 2009, India and China have a long-delayed conclusion of contracts, hoping to buy goods very cheap. Manufacturers, in turn, chose to reduce the production of potassium than the price on it. As a result of negotiations, the parties have found consensus at about $ 350-400 per ton. What affects the price of fertilizer? High food inflation is the main macro-economic factors – rising prices of agricultural products encouraged farmers to plant more and buy more fertilizer. In addition, the price takes into account energy prices, transportation costs, duties, and the dollar.

Ukrainian Globalist
2010-07-05 17:14, Commodities.

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One comment к “Potassium: market outlook”

  1. Stock Trading Says:

    We have to hope that somebody will discover a new way of getting high crop yield other than using known artificial fertilisers, which continue to increase in price. If this does’t happen, there could be major food crises across the globe in the future.

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