China agrees to pay triple for potash fertilizer

[jpak]

http://www.globeinvestor.com/servlet/story/ROC.20080416.2008-04-16T162409Z_01_N16364352_RTRIDST_0_BUSINESS-POTASH-COL/GIStory/

WINNIPEG, Manitoba (Reuters) - Chinese fertilizer importers agreed on Wednesday to pay more than triple what they did a year ago to reserve tight supplies of potash, sending the shares of global fertilizer makers to record levels.

China, the world's biggest import market for the nutrient, used to boost crop yields, will pay $650 to $670 a tonne for product delivered to its ports, analysts estimated.

"With the intense pressure on global food production and continued growth in potash demand, this is the reality for our industry for the foreseeable future," Bill Doyle, chief executive of Potash Corp , said in a statement.

Potash producers have found it hard to keep up with demand as farmers around the world, flush with returns from record grain prices, rush to produce more grain to feed people, livestock and the burgeoning biofuel sector.

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[Trillo]

1. I'd love to be able to buy potash at about $0.25 per lb.

I guess the middlefolks must be making a nice profit repackaging that metric ton.

[Tashca]

2. where do you get $0.25 a lb.?

I converted this to a short ton using the $650.00 figure....that comes to $590.90
This is KCL that is either 60% or 62% potash. Using the 60% figure I come up with $0.4924 per lb.
That is a slight bit higher than what KCL is being marketed in the midwest. I see another huge price increase coming.......because of this very high priced sale!!!

Potash Corp. and Agrium are the ones making the nice profit right now....

[sergeiAK]

3. That's also a delivered price

And delivery is a fair bit of that price, due to the recent surge in drybulk shipping rates.

POT isn't the only company making $$$ off of this, DryShips and similar companies get a piece of the pie too.

[Tashca]

5. Good point

Shipping is going through the roof with these energy prices.
I am still surprised at the cost of this potash. This is much higher than I would have expected for the volume.
About a month or so ago I heard a story about Potash Corp offering to sell China Potash for a certain price. Then China came back and said they wouldn't pay whatever that price was, but they would pay a significantly lower price. Potash Corp basically said no and we don't care if we sell it too you. They know China and the world needs this stuff....

[Trillo]

4. "1 metric ton = 2204.62262 pounds"

http://www.google.com/search?hl=en&lr=&safe=off&as_qdr=all&q=+lbs+per+metric+ton&btnG=Search

I didn't use a calculator, therefore, the qualifier "about".

It didn't occur to run a percentage of K, though that's a good idea. Last time I purchased K, it came as KOH, and was about $65.00 for (probably) 50lbs.

[Tashca]

6. Not familiar with that product

I am not familiar with KOH....for crop fertilizers I am only familiar potassium chloride (KCl) and potassium sulfate (K2SO4).
I personally will only use the Potassium sulfate....Agronomically it is far superiour.....but also much more expensive....@$200.00-$300.00 more per ton.

[Trillo]

7. Potassium hydroxide is also known as caustic potash.

http://web1.msue.msu.edu/vanburen/e-896.htm

It works well to raise the pH of phosphorous acid (H₃PO₃). Keeps the oomycotes away from tree roots around these parts, often applied either as foliar or trunk injected.

[izquierdista]

8. What happens to the coal ash?

Must be tons of it there, judging from the air in Beijing. Are they making it into suppositories and sitting on it?