Here is the new chart I have made. This graphic shows that...

Here is the new chart I have made.

This graphic shows that potash price is shadowing food price index by about 9 months delay and it is due to go up significantly at the beginning of new year.

The Food Price Index reached to 215 mark in 2007-2008 Food Price Crises. It was at 197 mark at the end of Oct. 2010 and it is in a steep uptrend. It is very likely that it will reach to the level of 2007-2008 Food Price Crises soon. I am not sure when UN will declare a Food Price Index Crisis again.

Food prices in China was up 10% only in October. Chinese government is trying to fight against raising food prices. (even no toll payments to vehicles carrying food now) The only Chinese potash producer Qinghai Slat lake Potash Co.,Ltd posted 83% year-on-year surge in third quarter net profit just recently. (Click here for news
). This should be the result of extremely high food prices which are increasing much ahead of the World Food Price index. Qinghai Slat lake Potash operates for 24 a day, and it is estimated that this potash resource will dry up in 30 years.

India is buying record volumes of potash in 2010 (expected to reach to 7mt this year. (It was about 6mt in 2009)

PotashCorp reported second highest Q3 earnings this year (Click here to read the full report
). "Record quarterly shipments by Canpotex to Latin America (38 percent of total Canpotex sales), along with strong sales to India (16 percent), China (10 percent) and other Asian countries (28 percent), raised PotashCorp's offshore sales volumes to 1.2 million tones for the quarter 59 percent higher than in the same period in 2009 and 3.7 million tones for the first nine months of the year."

BPC, (Belarusian Potash Co) lifted potash prices in Southeast Asia & Brazil's markets due to the demand picks up. http://www.indmin.com/Article/2713645/BPC-lifts-spot-potash-prices-in-Southeast-Asia-and-Brazils.html

ELM's stock price will go up significantly with the high potash prices in 2011.

Price Index sources for the chart;
FAO - Food Price Index: Click here
Potash Prices: Click here


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