How to Invest in Potash Stocks
The world’s population is increasing rapidly and is expected to reach over 9.7 billion by 2050.
This situation is creating positive fundamentals for the agricultural sector, including the potash market. A larger population means much higher amounts of food will be needed; however, with more people will come further urbanization and less farmland with which to work, meaning farmers will have no choice but to increase crop yields.
That’s where fertilizers like potash come in. Unsurprisingly, many investors are wondering what potash is and how they can gain exposure to the potash market. Read on to find out more about potash investing, and whether it may fit into your portfolio.
What is potash?
Potash is a term that refers to compounds and minerals that contain potassium salts. It is naturally white or colorless, but ore sometimes takes on a pink or red color due to impurities such as clay. Most potash comes from salt left over from ancient evaporated seas that lie underground.
There are several different types of potash, including sulfate of potash (SOP) and muriate of potash (MOP), which contain potassium sulfate and potassium chloride respectively.
What is potash used for?
Potash is most commonly used in fertilizers. All in all, 95 percent of the world’s potash supply is used to grow food. Potash fertilizer not only provides essential nutrients to food, but also improves water retention in plants and strengthens their roots and stems.
SOP is used on high-value crops, such as a variety of fruits and vegetables, nuts, tea, coffee and tobacco, and is seen as premium quality. MOP is more common, and is typically used on vegetables such as sugar beets, celery and Swiss chard.
Potash supply trends
According to the US Geological Survey’s latest data on potash, global potash production came in at 48 million metric tons (MT) in 2024 and consumption totaled 38.8 million MT. The potash sector is suffering from oversupply, and that has created lower prices and put pressure on potash producers.
The potash market has faced volatility in recent years, particularly from geopolitical conflicts. The agency estimates that in 2022 potash fertilizer demand decreased to between 35 to 39 million tons from 40.6 million tons in 2021 as a result of the Russian-Ukraine war.
Canada stands out as the top potash-producing country with output of 15 million MT in 2024, the vast majority of which was from the province of Saskatchewan.
Russia is the world’s second largest potash producer, with output of 9 million MT in 2024. Reclaiming its spot as the third largest producer, Belarus’ potash output rose to 7 million MT in 2024. It had fallen significantly in the prior two years, and it ranked at fourth place in 2023 with production of 4.5 million MT.
Russia’s war in Ukraine and its use of Belarus…
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