10/27/2010

Creating the OPEC of Fertilizer

Fertilizer companies dealing in potash are bidding and negotiating on mergers. There currently aren't very many suppliers of potash in the world and with mergers in the works this number looks like it will decrease. With a world oligopoly in sight and a monopolistic effect on local farmers, prices could very easily go up especially in the short run. A price increase would stress farmers and would be passed to consumers in the form of higher priced food. This is a lot of control for fertilizer companies to have simply because we all have to eat.

1 comment:

Dave said...

South Park had it right: the enemy is Canada, since they are the largest producers of potash.

I do take issue with the idea that this will lead to increased prices of food. It will certainly push in that direction, ceterus paribus.

But, the biggest factors in the price of food (which are at historic lows) are adequate use of technology, and government price supports. I don't think potash is a factor on the scale of these two.