Nobody seems to talk about the global food shortage anymore, but the secular trends behind it remain intact. The world may not need as much steel or copper over the next few years, but the number of diets in emerging market countries and demographics are changing rapidly, especially towards beef, poultry and higher protein.
Fertilizer demand has been under pressure but will return as well; demand is only delayed - not avoided. Farmers have been skipping re-ordering as they work off inventory and are not ready to blink ahead of Chinese price negotiations.
Nutrients drained from the soil each year, require replenishing or else yields suffer. The U.S. Department of Agriculture this week predicted grain inventories would fall to multi-year lows, so higher prices will encourage farmers to break out the checkbooks.
The longer the wait, the sharper the demand backlash becomes. Big players include K+S (SDF), Europe's largest supplier of fertilizer who reported strong demand and good numbers yesterday, Potash Corp of Saskatchewan Inc (POT), ICL (TASE:ICL), Intrepid Potash Inc (IPI), Uralkali (URKA:MM) and Silvinit (SILV:RTS) in Russia.
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