Global Market Overview
Potash reserves are unevenly distributed around the world. Developing countries have increasing crop yield requirements since potash has been historically under-applied compared to scientifically recommended levels, the demand of potash remains very high.
- Economically potash deposits are geographically concentrated: Nearly 90% of the world’s potash reserves are located in Canada (46%), Russia (35%) and Belarus (8%). There are 12 major potash production countries, 2/3 of the world’s potash production comes from Canada, Russia and Belarus. Canada has almost half of known global potash reserves and approximately 35% of world capacity.
- Major consumption countries rely heavily on imported potash：Some major potash consumption countries in Asia and Latin America have almost no production of potash, they are mainly rely on the imported potash to meet their demand. The international trade of potash accounts for nearly 80% of the total market demand. Canada and Russia have abundant potash resources but their demands for potash are very low, which makes them become the two major potash exporters in the world.
- Since the potash deposits are concentrated in specific areas, a large percentage of the world’s potash capacity is held by relatively few players：Saskatchewan potash feeds the export market through Canpotex Limited, the offshore marketing agent for the three primary producers in the province, including PotashCorp, Mosaic Co., and Agrium Inc.; exports from producers in Russia and Belarus are primarily handled by Uralkali and Belaruskali, respectively. PotashCorp is the industry’s largest producer, with approximately 20% of global capacity.
- The global price of potash-intensive crops remains strong, driving the increasing demand for potash: grain and oilseeds consume over half of the potash used worldwide; the reminder goes to other consumers and crops such as cotton, coffee, fruits, vegetables and sugar crops. As populations grow, potash plays an increasingly important role in enhancing crop yields to help meet the rising demand for food. It is expected that potash demand will grow at annualized long-term rate of 2.5% – 3%, reaching approximately 70 million tonnes by 2020.
China’s Potash Demand
- China is facing a shortage of potash resources, its potash reserves only account for 2% of the world’s reserves. Potash reserves in China are distributed unevenly, 96% of the resources is concentrated in Qaidam Basin, Qinghai and Lop Nur Salt Lake, Xinjiang.
- China is one of the largest potash consuming countries in the world, where potash has been historically under-applied. As China’s population expands and diets keep improving, the pressure to increase crop yields will continue to mount. It is expected that China’s demand for potash will continuously increase 5%-6% per year.