Potash Price May Almost Double to $900/Ton on Limited Supply

By Theresa Tang

July 8 (Bloomberg) -- Potash prices may almost double to $900 a metric ton excluding freight costs over the next two to three years amid higher food demand and limited supplies of the soil nutrient, Potash One Inc. said.

``There are no new mines in the pipeline in the next five years,'' Paul Matysek, chief executive officer of Potash One, a Canadian exploration company, said at an industry conference in Shanghai today.

Potash reached a record this year amid a global shortage of crops used for food, animal feed and biofuels. Potash Corp. of Saskatchewan Inc., the largest producer, Israel Chemicals Ltd., Germany's K+S AG and OAO Uralkali of Russia more than tripled contract prices for China to $567 a ton in April.

``Demand is expected to be driven by developing countries such as China, Brazil and India,'' Matysek said. ``Their dietary preferences are changing to protein-oriented from starch- oriented.''

China, the world's biggest grain grower and consumer, Brazil and India made up almost half of global imports of the fertilizer in 2007, according to the International Fertilizer Industry Association.

Fertilizers using potash, the common name for potassium chloride, improve crop yield by helping plants absorb nitrogen, use water and sunlight more efficiently, and fight insects and disease.

To contact the reporter on this story: Theresa Tang in Shanghai at [email protected]

Last Updated: July 8, 2008 05:22 EDT