For individuals within the agricultural industry, potash has been a hot topic recently. Potash is basically potassium, one of the critical nutrients that make modern agricultural yields possible. Potassium really only comes from potash when it comes to fertilizing crops. The world desperately needs potash to make food. Potash hasn’t been needed as much anymore with the other minerals being more important. There is supposed to be a change with potash within the lead. It appears like a Canadian potash company will be taken over in a hostile manner because of an Australian minerals business that wants to profit.

Potash urges shareholders to resist BHP tender

The potash market is mostly controlled by Potash, or Potash Corporation of Saskatchewan. The Canadian fertilizer company should be concerned about a company in Australia. The big minerals extraction company in Australia, or BHP Billiton, is trying to get their hands on the company. The New York Times reports how much BHP is willing to pay to get their hands on the company. The offer was $ 130 a share. The Potash board made their response. Its answer was that they wanted some more money for it. In response, BHP launched a hostile takeover of Potash by beginning a tender offer for the very same price, which means BHP is dangling the cash directly in front of shareholders. Potash is urging its shareholders to resist BHP’s tender while it searches for a better price from one more bidder.

Potash is critical to the world’s food source

Potash is produced in 12 countries. More than 75 percent of global supply comes from Canada, Russia, Belarus and Germany. Potash is really just a term to describe any potassium that is created, which is very important for fertilizers, reports Reuters. Plants will to better with less disease after having some potash. They also will be better quality and have a greater quantity. Potassium in fertilizer solely comes from this. For years, the price of Potash has been extremely volatile. If you bought potash 10 years ago, you can buy it for cheap. It was only $ 150 a ton. The global food crisis happened in 2007-08. This was when potash prices went up to $ 1,000 a ton. Now you are able to get it for about $ 350-$ 375 a ton.

More individuals want Saskatchewan potash

Potash had been overlooked in a recent commodity market boom until BHP’s aggressive moves. Entrepreneur reports that if the growth in potash demand over the last five years continues, by 2011 the world will be unable to produce what it needs to sustain the food supply. There are many countries wanting more meat making it so potash is more needed. Examples of these countries are Latin America, China and India. Within the next 20 years, 25 percent of the world could run energy off of biofuels such as ethanol as outlined by the UN, which is one more reason. Potash has gone up through this with an increase in wheat and corn prices. It is hard to make more potash though. There are more than 25 years put into 85 percent of the potash mines right now. It seems difficult to produce more potash. The Saskatchewan business experiences this problem.

Further reading

New York Times

dealbook.blogs.nytimes.com/2010/08/20/bhp-begins-tender-offer-for-potash/?src=busln

Reuters

reuters.com/article/idUSTRE67J2SQ20100820

Entrepreneur

entrepreneur.com/tradejournals/article/166229304.html