China’s Passion for Potash

With China rumored to be angling to make a bid on Potash Corp. of Saskatchewan to rival that of , the Globe and Mail looks at why the mineral matters so much to the Chinese:

The reason for Ms. Han’s interest is simple. Compound fertilizers – of which potash is a key component – are the only thing on sale at the Gold, Honesty and Trust Agricultural Corporation where she works as a manager. She’s also a grain farmer, and relies upon such fertilizers herself to improve crop yields.

The obscure mineral is as important to Ms. Han and her company as it is to China as a whole. The country is now the world’s biggest user of potash as it struggles to produce enough food to feed the itself amid a population growing in numbers and appetite, and farm land diminishing in size and efficiency.

Ms. Han shares the government’s worries a BHP takeover will lead to higher fertilizer prices worldwide, something few in this poor farming city can absorb. “The farmers can’t afford it if the price goes any higher,” the blunt-talking 40-year-old says. “They won’t pay for it, they’ll just stop using fertilizer.”

See also an earlier report from the Wall Street Journal blog.

September 14, 2010, 10:12 PM
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