scotiabank says: potash to be top pick in 2011

The "The Food Price Index and Potash Price Analysis" comparison chart I have made and posted here (Post #: 6020542) on 30/11/2010 is now being confirmed by the news.

I said "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.

Now the confirmation of my analysis have started to flow. First one I have come across is from Scotiabank, a Canadian investment bank.
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Source: Potash Investing News, By Leia Michele Toovey
http://potashinvestingnews.com/2141-potash-to-be-a-top-pick-in-2011.html

"According to the recent report by Scotiabank, an increased demand for potash as crop prices rise has potash poised to be a top commodity pick in 2011. The price of potash coming into the Port Metro Vancouver topped out in 2008, at about $1000 US per tonne in late 2008, said Patricia Mohr, a commodities specialist at Scotiabank. However, after the recession hit, potash prices took a significant hit, added Mohr. Potash dropped down to around $350 per tonne.

In 2011, potash will benefit from a rapid ascent in the price of input intensive grains.

As the price of grains rises, so does the incentive for farmers to apply fertilizers to their fields. The three crops that use the most potash per hectare planted are corn, sugar cane and palm oil, said Mohr. All three of these crops have already enjoyed a rally.
Russia's ban on exporting wheat and barley products rallied grain prices this spring, said Mohr.

At the same time, corn prices have increased, as China demands more corn to feed livestock for a population looking for more meat.

An increasing demand for ethanol is also driving corn prices, said Mohr.

With fertilizer applications for these crops in the Northern Hemisphere around 3-1/2 months away, Mohr anticipates that potash values will rise in the first quarter."
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Here is my graphic analysis again;


CONSOLIDATION POTASH INDUSTRY IS HEATING UP -
RUSSIAN URALKALI IS TAKING OVER RUSSIAN SILVINIT
If you open the link above you will see more news. The next important news is from Russia;

"Uralkali officially launched a $7.8 billion friendly takeover of domestic rival Silvinit on Monday. Pavel Grachev, Uralkali chief executive, said in a statement that the merger is a critical step toward the creation of a leader in the global potash sector. The new company, with an estimated market capitalization of $23.9 billion will be the second-largest potash producer in the world, behind Potash Corp. of Saskatchewan"

After BHP's failed takeover bid for PotashCorp, the Russian takeover is the messenger of new takeover attemps in the market IMO. I don't know who is the next ( I am trying to guess but needs a bit more analysis) but I am expecting a step from RIO TINTO and VALE of Brasil. China is still silent which is very interesting as they are the biggest consumers of potash.

And I don't know when ELM's takeover will happen, and who will be the punter! Let's hope that will happen as late as possible.