If you are thinking of investing in potash this article examines the various drivers that determine the price of potash; how to invest in potash and also summarises the main potash producing companies and regions.
What determines the price of potash?
One of the major determinants of the price of potash is the availability of agricultural land suitable for crop production; and the supply of that ‘permissible’ land depends on complex local political, economic and environmental factors.
In the meantime, the world’s population is expected to grow over 1% year-on-year; some major population areas are becoming wealthier, which in turn increases demand for high quality food products.
Therefore, the demand for potash fertilisers will continue to grow. It is expected that global demand will increase by a compounded rate by 2.5 to 3% CAGR over the next five years.
Ultimately, potash prices are determined by supply and demand; and it is not uncommon for potash producers to reduce supply in order to increase prices.
For example, China produces the most Sulphate of Potash (SOP), and a substantial proportion of its use is driven by tobacco production and consumption; and this of course will continue to impact prices.
How to invest in potash?
Unlike say a commodity like gold for example, which can be purchased as an investment in physical form (bullion or coins), potash cannot be traded in the same way by retail investors.
The best way to invest in potash is through buying shares in the limited number of listed potash producing companies.
Who are the main potash companies?
The most important potash producing companies globally include SOPerior Fertilizer Corp (formerly known as Potash Ridge); Potash Corporation of Saskatchewan; the Mosaic Company; the Arab Potash company and Uralkali.
In the UK, arguably the most recognised potash company is Sirius Minerals; based in Yorkshire, which was acquired by Anglo American Plc in March 2020. While, it is many years away from being a potash producing company; it expects to become a major player now that it has finally sorted out the funding needed to develop its mine.
As the option to invest into Sirius Minerals is no longer available to retail investors , other UK listed potash companies to consider include Emmerson Plc and Kore Potash Plc.
Where are the main potash producing regions?
Two thirds of the world’s potash production is in Canada, Russia and Belarus. The world’s total annual potash production is around 30 million tonnes. The table below lists the major potash regions, their typical annual outputs, and estimates of their potash reserves.
| Worlds main potash producers | Output 2017 (million tonnes) | Reserves (million tonnes) |
| Canada | 12.0 | 1,000 |
| Russia | 7.2 | 500 |
| Belarus | 6.4 | 750 |
| Chins | 6.2 | 360 |
| Germany | 2.9 | 150 |
| Israel | 2.2 | 270 |
| Jordan | 1.3 | 150 |
| Chile | 1.2 | 44 |
| Spain | 0.7 | 210 |
| United States | 0.5 | 40 |
| United Kingdom | 0.5 | 24 |
| Brazil | 0.3 | 90 |
Potash mining
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