Imbalance

In mid 2008 there was a spike in both crop and and fertilizer prices. Potash demand  began to outstrip supply. When the general situation eased and the price of Nitrogen and Phosphate fell potash remained unaffected and peaked in 2009. This situation reflected the unusual structure of the potash industry  where a small handful of companies maintain tight control over their production volumes in order to support higher prices.

To feed this growing fertilizer demand is is still estimated than approximately  two million tonnes of potash are currently required each and every year. This is equivalent to one new mine coming on-stream each year's which is not yet happening. In spite of such upward-trending demand, potash is still being significantly under-utilized in many countries due to poor farm credits and poor supply.

In fact, market experts estimate that the world's leading emerging economies (Brazil, Russia, India, and China) alone will require an additional 28 million tonnes of potash annually to maximize fertilizer application rates. This is the equivalent of around 14 new potash mines. This major shortfall is an ideal environment in which Western Potash aims to develop a world-class, major tonnage potash deposit.