Potash (NYSE:POT) President Bullish on Company's Future

Potash (NYSE:POT) president Garth Moore gave his reasons for the bullish attitude he has for the company going forward, after recent quarterly results imply a possible global rebound for the potash market.

While few watching the fertilizer company and industry are in doubt of the inevitable growth in demand of the products, there is still a question of when that will come about, although the if isn't really there any longer.

Moore was asked in an interview what he sees driving the demand for potash, and ultimately his bullishness for the company and industry.

Three things were identified by Moore: Higher grain prices, low inventory held by farmers, and growing world population.

Higher grain prices are driven by perceived supply problems so far this year, but that has created better margins for farmers, which allows them to spend more on fertilizer. That could change quickly, but for now that's the reality.

That leads into low inventory, which, along with increased margins, could generate stronger demand from farmers.

Most important to Moore is the demographics involved, which inevitably will lead to increased demand, and that is the growing global population.

It's different this time around because, even though there has always been growing global populations, there hasn't been the disposable income to make a difference in reference to demand, as many had to continue living at sustenance levels.

Now the middle classes in emerging markets have the income to pay for more protein-based foods, and that will come from meat, which the grains must feed, and which fertilizers must help grow.

Moore is right in that these will drive fertilizer prices up, but the ongoing recessionary pressure around the world could still hold prices and demand down until there's a real recovery.

That could take several years, depending on how much damage central banks like the Federal Reserve, and governments as well, do with their quantitative easing policies.

Sooner or later there can be no doubt fertilizer prices will rise, and with it the share price of fertilizer companies which have positioned themselves to take advantage of it.

Potash is among those that have, and investors with patience will eventually be rewarded.