Supply and Demand

Supply

  • Potash essential
  • No commercial substitute
  • Crop yields fall sharply in its absence
  • Industry susceptible to supply shocks
  • Production growth not sufficient²
  • Depleted existing mines and reserves
  • Grain inventories approaching all-time lows⁴
  • 25 year grain stocks-to-use ratio = 25%, today = ~20%
  • Growth in crop production needed
  • Higher crop prices reflect tight supply
  • Most new projects increasingly expensive
 

Demand

  • Estimates are for 33% population growth by 2050 (80M people/year)¹
  • Potash fertilizer consumption growth will be led by Asia and South America
  • India annualized growth ‘01 – ’11² = ~6.3%
  • China annualized growth ‘01 – ’11² = ~5.5%
  • Latin America annualized growth ‘01 – ’11² = ~4.8%
  • Improving diets - shift towards fruits, vegetables and meats
  • Decline in arable land
  • Food security is becoming a key global issue
  • Increase in bio-fuel production
  • Annualized consumption growth 2001 – 2011² = >3%
  • Long term demand expected to maintain this trend
  • North American Potash production is declining³

Source 1: United Nations
Source 2: Fertecon, IFA, Industry Publications
Source 3: International Potash Nutrition Institute (IPNI)
Note 4: United States Department of Agriculture (USDA)