The world's largest mining company, BHP Billiton, has launched a $300 million takeover for a Canadian fertiliser company, Anglo Potash.
Potash, or potassium chloride, is the most widely used fertiliser in Australia, and is now retailing for close to $900 a tonne.
Agribusiness analyst with Deutsche Asset Management, Bill Barbour, says BHP Billiton is diversifying into agricultural commodities and chemicals because it can see a profitable long-term future.
"You've got a limited amount of agricultural land, you've got the madness of biofuels at the moment and through all of that you've got the vagaries of global warming and limited amount of water," he said.
"So all of these are long-term secular trends that are going to increase the price of food, and companies that are in a position to basically enhance yields through agrichemicals, fertilisers.
"All these companies are going to be in demand, and the products they have are going to be in demand."
