Potash producers could wring more out of farmers as global food prices soar
Bloomberg reports prices in the $150 billion fertilizer market are lagging behind gains in food costs, providing farmers another incentive to boost production and leaving a gap for potash producers to further increase prices which have already surged 29% this year.
Potash is 36% cheaper than in June 2008 when corn rose to a record, according to data from ICIS, a commodity-pricing company. In contrast food prices gained 4.3% over the same period, an index of the United Nations shows.
Jason Miner, a chemicals analyst at Bloomberg Industries said: “Slower price increase does mean less potential demand destruction for all fertilizers.” Demand for potash plunged 40% in 2009 after producers raised prices almost threefold the year before.
ETF Daily News reports corn prices keep edging upward as stockpiles shrink and that corn could bring $7.75 a bushel by early 2012 — versus $7.28 today — as more of the grain is used for ethanol or shipped overseas. In Asia a bowl of rice is already 22% more expensive than it was last year.