Potash hits $1000 per ton

Major potash suppliers are investing more than $2 billion to increase production to meet demand. Potash prices have risen tenfold in the past few years to $525 per ton with new contracts announced at $1000. Arizona has large potash resources that have never been developed because they were not thought to be economically competitive.

On Wednesday, it was announced that "Canpotex confirms that it has now concluded significant volumes for shipment to Asian spot markets in the fourth quarter at a price level of USD 1000 for standard grade material ($1025 for granular grade). As a result, Canpotex is advising it's customers that all new sales for shipment through the balance of 2008 will be priced at these new and higher levels. The new pricing will also apply to all new sales to customers in Brazil and Latin America.

"These new and higher price levels are supported by continued strong offshore potash demand and by the historically low potash working inventories that have resulted from record demand this year. These factors have created an extremely tight supply situation for potash and this supply/demand scenario is expected to continue into 2009."

The world's largest fertilizer producer, Potash Corp. of Saskatchewan, announced yesterday they will invest $1.6 billion to add 2.7 million tons capacity at three of their Saskatchewan mines and mills. The Russians also announced they have investors putting $630 million into vast potash resources in that country.

A number of companies are actively exploring and evaluating Arizona's potash, with large blocks of mineral lands being leased. AZGS is preparing a technical report on the size of the Arizona potash deposits that should be released shortly.