Potash is becoming increasingly more important in agriculture right now. Potassium is one of the primary things potash is which helps with agriculture quite a bit. Fertilizer uses only potash as its source of potassium. The world desperately needs potash to make food. Other minerals are needed more than potash lately meaning the market has dropped. However, a huge increase in demand for potash is in the forecast. This has inspired the hostile takeover of a Canadian potash business by an Australian minerals business.
Potash more of the place to be when it comes to stock rather than BHP
Potash Corporation of Saskatchewan is known as Potash by numerous. It is also the business that controls much of the potash market within the world. The Canadian fertilizer business should be concerned about a business in Australia. The big minerals extraction business in Australia, or BHP Billiton, is trying to get their hands on the company. The New York Times reports how much BHP is willing to pay to get their hands on the business. The offer was $ 130 a share. The Potash board rejected the offer as too low. BHP is putting the cash right in from of shareholders to try and get a hostile takeover Potash by paying a tender offer. BHP’s tender is something shareholders are told by Potash to stay away from. They want another bidder willing to offer more money right now.
World needs potash for food
Potash is produced in 12 countries. Potash is dominated by Canada, Russia, Belarus and Germany. This is because they create 75 percent of all the potash. As outlined by Reuters, fertilizers need potash. Potash is really just what you call anything that is potassium. Potash strengthens a plant’s resistance to disease, improves crop quality and boosts yields. It is very important get potassium in fertilizer. Potash is the only source for that. For years, the price of Potash has been extremely volatile. If you bought potash 10 years ago, you could buy it for cheap. It was only $ 150 a ton. The price of potash skyrocketed to more than $ 1,000 a ton during the global food crisis of 2007-08. Since then, it has crashed to about $ 350-$ 375 a ton.
Get your potash from Saskatchewan like everyone else wants
Until BHP has made all these moves, Potash hasn’t really been anything everyone cared about. The growth of demand for potash in the last five years has gone up quite a bit. It that continues, by 2011 the potash supply could never be enough for the world, reports Entrepreneur. A big reason for the forecast for exploding demand is increasing meat consumption trends in China and places like Latin America and India. Within the next 20 years, 25 percent of the world could run energy off of biofuels such as ethanol according to the UN, which is another reason. Wheat and corn prices have gone up through this already. Now it seems that potash demand has to go up as well. It isn’t all that easy to make more potash available. More than 85 percent of the world’s potash mines are more than 25 years old. It appears difficult to produce more potash. The Saskatchewan company experiences this problem.
Additional reading
New York Times
dealbook.blogs.nytimes.com/2010/08/20/bhp-begins-tender-offer-for-potash/?src=busln
Reuters
reuters.com/article/idUSTRE67J2SQ20100820
Entrepreneur
entrepreneur.com/tradejournals/article/166229304.html
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