It appears like there is going to be a push for more potash in agriculture. Potash is essentially potassium, one of the critical nutrients that make modern agricultural yields possible. Crops need potassium very much in its fertilizer. Fertilizer uses potash as its source of potassium. The world desperately needs potash to make food. Because there is no futures market for potash, other minerals have outperformed it in a recent commodities market boom. The potash demand is actually supposed to go up now. It appears like a Canadian potash company will be taken over in a hostile manner because of an Australian minerals business that wants to profit.
BHP tender stopped with potash urging shareholder
Potash Corporation of Saskatchewan is known as Potash by numerous. It is also the company that controls much of the potash market in the world. The Canadian fertilizer company should be concerned about a business in Australia. The big minerals extraction company 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 company. The offer was $ 130 a share. The offer wasn’t enough, if you ask the Potash board. In response, BHP launched a hostile takeover of Potash by beginning a tender offer for the exact same price, which means BHP is dangling the cash directly in front of shareholders. Potash is trying to get a better offer from another when getting shareholders to stop selling to BHP.
Potash extremely important to feed the world
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. Reuters reports that potash is the generic term for different compounds containing potassium, a critical ingredient in fertilizers. Plants will to better with less disease after having some potash. They also could be better quality and have a greater quantity. It is very important get potassium in fertilizer. Potash is the only source for that. For years, the price of Potash has been very volatile. Ten years ago it sold for under $ 150 a ton. In the global food crisis of 2007-08, it went up to $ 1,000 a ton. Since then, it has crashed to about $ 350-$ 375 a ton.
More people want Saskatchewan potash
Potash has been ignored most recently. It took the moves by BHP for anybody to acknowledge its existence. Entrepreneur reports that if the growth in potash demand over the last five years continues, by 2011 the world can be unable to produce what it needs to sustain the food supply. You will find many countries wanting more meat making it so potash is more needed. Examples of these countries are Latin America, China and India. Another factor is exploding growth in biofuels like ethanol, which the UN said could meet 25 percent of the worlds energy needs in the next 20 years. Both of these trends are already spiking wheat and corn prices, and portend a huge increase in potash demand. It isn’t all that easy to make more potash available. You will find more than 25 years put into 85 percent of the potash mines right now. It appears impossible to produce more potash. The Saskatchewan company experiences this problem.
Further 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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