Potash will play a huge role in Saskatchewan's predicted economic growth of an average rate of 3.5% over the next two years and the reversal of a trend of population decline, according to the latest economic forecast by Scotiabank.
Potash production is expected to climb close to its 2007 peak of 11 million tonnes in 2011, after suffering a dramatic 60% drop during the recession of 2009.
Farmers' inventories of potash are now quite low, necessitating an increase in purchases in order to sustain crop conditions this year. Potash producers have kept pace but now find their inventory levels are dropping, which is supporting prices. The long-term demand outlook remains positive, particularly from abroad, and a flurry of investment will see production nearly double by 2015.