The Potash Strike Pummels Inventories as Prices Soar

I’m sure some of you are bored with these updates on the strike at three Potash of Saskatchewan (POT) plants in Canada. Those plants produce about 30% of Potash’s potash output.

The strike began in early August so it’s been about a month now.

Already, the 5% of Potash’s industrial customers have been put on allocation. These are businesses that distribute caustic potash to food companies, detergent manufacturers and others.

Now, there are signs that Potash will not be able to fill contract obligations with some in the agriculture sector (who use the potash for fertilizer.)

Industries Shutting Down

But the situation is getting worse in the industrial sector. Several of the largest caustic producers are simply shutting down. Without the potash, they can’t make product. The product goes into different food items, including many beverages.

For those who can get it, prices have soared. Who’s going to pass along those price increases and how? In some cases, prices have tripled in only 3 weeks. Will you soon be paying much more for a coke?

The Press Doesn’t Get It

The mainstream press is hardly covering this story. But shortly, it could become the biggest story in agriculture.

Sure, there are other potash suppliers in the fertilizer sector but they’re already strapped and supply is already tight.

What happens when many people are trying to get a product that is in short supply?

Yep. Exactly. The price soars.

Stay tuned.