Potash stock has been rising steadily over the past few years and it is expected to continue to climb. Investors are watching the stock as potash revenue has more than doubled over the past year. With all the excitement on the stock market over the mineral, many people are asking what is potash. Let us look at a few facts about the mineral and why it is in such high demand.
Ancient people used to leach the ashes of land and sea plants in order to produce potash and used it to make soap, glass, and to bleach textiles. The leaching process left a white ash in the pot, thus the name now used to describe potassium salt and potassium carbonate. Large deposits of potassium have been found to exist hundreds of feet beneath the ground where ancient seas once existed. As the water from the sea evaporated, the salt settled to the bottom and created the beds which were then covered over thousands of years by soil.
Before these deposits were found and mined extensively in the 20th century, people would burn the trees they cut down to clear land for farming and leach the ashes for potash. The first potassium deposits were found in Germany during the 1860s. They were the leading producer until after World War I when all German exports were restricted.
Potassium is used extensively by the farming industry. It protects crops from disease, pests, extreme temperatures, and adds important nutrients to the soil. It also contributes to building stronger plant stems and roots. Arable land is on the decrease while the global population continues to rise dramatically. The need to feed the worlds population makes fertilizer extremely important. So much so, that 95% of all the potassium mineral mined is used for fertilizer.
In addition to farming, there are other industries that need potassium minerals. It is used in brewing beer, added to water as a softener, used in manufacturing soap, glass, fireworks, and used in fire extinguishers. The textile industry uses it as a bleaching and disinfectant agent, it is used for snow and ice melting, and in aluminum recycling.
In India the fertilizer is vital to their crop production where they already have pressure put on their food supply. Brazil has increased their demand due to globally supplying soybeans, sugar cane, corn, and other crops to the world. North America expects to continue having above average crop yields and need more fertilizer. Asia also requires more fertilizer to meet the special nutrient requirements that go with raising rice, in addition to still provide the world with oil palm, rubber, and sugar cane.
In the full year of 2011, the expected gross margin is expected to be in the range of $2.8 – $3.1 billion. As the demand for this product continues to grow, investing in its stock will continue to bring strong returns. In addition the current move to find lower cost ways to produce the mineral ensures higher investment dividends.
The continuing increase in global population and decrease in arable land is largely responsible for the growth in potash stock on the market. The demand for fertilizer to aid in the production of corn, soybeans, and other crops will remain strong. With potash companies taking advantage of large deposits of the minerals, the stock is expected to become more valuable in the very near future.
Find out What is Potash and why it is essential to boosting the world’s food production, and why efficient mining solutions are key.