High Potash Prices are Killing Demand

Farmers in China are really cutting down on Potash use due to high price. A ScotiaBank analyst says producers cutting production are causing high prices, which in turn cause demand destruction.

China's import of Potash have dropped for 2 years now. China's import of Potash:

2007: 9.4M tons
2008: 5.1M tons
2009: 1.7M tons (YTD)

Analysts says that importers still have 2M tons of inventory from 2008, which were bought at $600!

Price is too high compared to Nitrogen, so farmers are cutting down.

Watch interview on BNN Video.

This does not bode well for the fertilizer producers, which have been on a roller coaster in the last 2 years.

POT chart:

(click to enlarge please)