THE MACRO ON POTASH point_down
The only way is up for potash given the estimated global population growth of 2 billion over the next 3 decades. The outlook is simple, the more people there are the greater the demand.
Regardless of cost people need to eat, it is perhaps one of the few constants we can expect over the next few decades. This very basic fact underpins Fergus’ view that this is:
“a pretty bullet-proof growth curve”
With a decreasing ratio of arable land per person, the need for fertiliser will increase. Soaring food demand and reduced farmland will inevitably require greater levels of production, and one of the primary tools for increasing production is fertilisers, like potash.
Cullen cites that demand for MOP is expected to have an annual growth rate of 1-2%, while SOP is predicted to double that with between 4-5% growth annually.
This effect is further compounded, particularly for SOP, by the rise of standards of living across the developing world, which will fuel demand for higher quality, more nutrient-dense foodstuffs.
The macro outlook is simple – a growing population with higher standards of living will require more, and greater quality food from a smaller proportion of arable land, resulting in increasing demand for fertilisers, in this case potash.