Summary
Potash remains one of the most vital crop inputs. Major importers of potash like china are always looking for strong negotiations. Also countries such as China desperate to feed its growing population, could the Chinese market bolster demand and put a bottom on prices that have fallen from US$ 1,000 a tonne last year to about US$ 500 a tonne this fall.
Analysis
China is a huge importer of Potash and alongwith India consumes a huge amount of potash. Farmers in Asian countries have remained reluctant over the years because of the huge prices of this nutrient. In July India signed potash prices at about 480 USD per tonne. On the other hand chinese are always very good in negotiations.
Recently, China’s national Xinhua news agency reported that Beijing-based Zhongchuan International Mining Corp signed a deal to explore for potash on a Saskatchewan land parcel with annual capacity of three million tonnes.
A lot of developments are taking place in Potash industry. According to the Saskatchewan Energy and Resources, the company’s Canadian branch, Canada Jiuyi Mining Investment Ltd, has been conducting drilling and seismic tests on land southeast of Saskatoon, since it received a potash exploration permit from the provincial government in September 2008.
Perhaps the most important thing is that Chinese investment in Canada’s potash resources will be a “win-win” situation for both economies, despite differing local opinions on environmental and social consequences.
China has a huge edge and that is the fact that they import huge amount of potash i.e about 5-8 million tonnes a year which can put suppliers on a back foot as far as price is concerned.
We will have to wait a little and see how china goes with its decision to enhance potash influx.
