dap price falls, page-6

DAP (and RP) price falls in the short term are not really all that surprising, surely. Farmers are still finding it hard to get credit and the overall economic picture is still very weak for the foreseeable future. But the longer term scenario remains, being one of low fertiliser applications this season --> lowered food production in 2009 --> exacerbated food shortages late 2009 --> probable large spike in food prices late 2009-early 2010 --> enhanced demand for fertilisers in 2010.

Oversimplified perhaps but if this general scenario plays out it will coincide perfectly with first production out of Wonarah/Arruwurra. MAK just needs a farsighted enough supporter to bankroll the development of its projects, and I would speculate that India could well come to the party via an offtake agreement given the size of MAK's funding requirements in the context of how much they subsidise their farmers' fertiliser consumption each year. And by 2010 it sounds like we could well be entering into an agricultural boom which would pull up most stocks relating to food supply, MAK included.

Wouldn't that be nice. Not guaranteed of course, but very tasty to be in on the ground floor while things look less certain in the short term.