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Factors Affecting Potash Stock

By Adrianna Noton

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Published: 02Feb2012
Word count: 503
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While many people may wonder what is potash, some base a good part of their lives following its every move. Potash is a mineral that was created when ancient seas evaporated, leaving huge quantities deep within the earth's crust. It is mined throughout the world and used as a vital ingredient for compound fertilizer, along with nitrogen and phosphate. Potash stock is traded on major stock markets, as interest in this important mineral is high. Potash plays an important role in creating the potassium that soil and plants need for healthy growth, and it can't be substituted with any other substance. Several different factors will affect potash stock, and how it performs on the global market.

Since fertilizer is the main product that potash is used for, the demand for fertilizer will affect potash stock. Typically, the global demand for fertilizer is fueled by population growth and other factors like weather patterns, dietary changes, fertilizer application rates and general global economic conditions. As these factors shift or change, so too will the demand for fertilizer and potash stock. Some areas of the world where potash in fertilizer is heavily-used are volatile politically or environmentally, and the need may rise or fall dramatically depending on what is happening at the time. Since potash can't be substituted in fertilizer, if conditions are calm and demand is high, potash stock will do well.

The actual supply of potash is another factor that is always going to affect potash stock. Only a handful of countries produce most of the potash that is used in the world, so if mining isn't going well in one or more countries, potash stock could suffer. Factors such as weather or equipment problems or problems with the actual mine could affect the potash supply that puts shipments and deliveries on hold. The companies that mine for potash have their processes in place, but problems can always come up that affect the supply coming out of the mine. If warehouses and manufacturing facilities and farms and countries are waiting for potash or fertilizer containing potash, it's obviously going to affect the performance of potash stock.

Even if the potash is plentiful and the demand is high, the cost of getting potash where it needs to be is going to affect potash stock. As fuel prices fluctuate, so does the cost to transport potash from mines to where it needs to go. Changing prices for natural gas will also have an impact on the cost of processing the mineral, which has an impact on potash stocks. As biofuels are used more and more as an alternative fuel source, the need for fertilizer may also increase.

Potash is also used as an additive to drilling fluid for oil and gas drilling, which is an industry that is heavily affected by energy prices. With so many people watching and wondering, what is potash going to do today, keeping the process moving smoothly is an important one.

Wondering why Potash Stock matters? Look to Western Potash Corporation. 701 West Georgia Street, Vancouver, BC V7Y 1C6 (604) 689-9378 to learn how potash-based fertilizers can help solve the world's food crisis.

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