Thursday, May 13, 2010

Potash (NYSE:POT), Mosaic (NYSE:MOS) and World Food Demand

The price of potash has moved up and down with the economic conditions over the recent past, and that has held down companies with a strong exposure to the fertilizer like Potash (NYSE:POT) and Mosaic (NYSE:MOS).

Although in the short term it'll probably take some time to work their way out of this, in the long term, the future looks bright, as the growing need for fertilizers as the world population grows and needs a lot more food will strongly benefit fertilizer companies.

Global shipments of potash this year are estimated to be from 47 million to 50 million.

One unexpected positive demand is in Canada, where a mild spring and strong planting of canola - about 16.9 million acres - make it probable that even in the near term there will be a boost in potash sales. But the long term demand for food and fertilizer should make Potash Corp. and Mosaic very good investments.

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