The demand for ethanol means continued increases in potash consumption.
Contract to Expand
The first half of 2006 brought a brief slowdown to the potash industry as China and India engaged in extended negotiations on new potash supply contracts. The lack of potash movement reduced inventories held by major importing countries, depleting the supply pipeline. This set the stage for a new wave of anticipated growth.
Low importer inventories and demand for nutrients needed to produce crops for rising food and fuel requirements are expected to have a long-term positive impact on potash movement into world markets.
The increasing focus on ethanol production is expected to fuel the already strong long-term trend of rising potash demand growth.
In recent years, many countries have supplemented their scientific understanding with the economic strength required to bring potash application into proper balance with other nutrients. That has frequently pushed potash consumption growth above the historic trend line.
Many potash producers have been operating at or near capacity to keep pace with consumption growth and will be further challenged by the needs of farmers trying to match the growing demand for crops needed by the ethanol industry.
This document contains forward-looking statements which involve risks and uncertainties, including those referred to in the company’s annual report. A number of factors could cause actual developments to differ materially from those in the forward-looking statements, including, but not limited to, fluctuation in supply and demand of primary products and raw materials; changes in competitive pressures, including pricing pressures; changes in capital markets; changes in currency and exchange rates; unexpected geological or environmental conditions; and government policy changes.
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