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Potash is the third most widely used fertilizer nutrient, following nitrogen and phosphorus. Fertilizer use accounts for approximately 95% of total potash consumption, the balance being consumed in a variety of industrial applications. World potash production is confined to only fifteen countries and is dominated by Canada, the former USSR and Germany, which together accounted for about 76% of world production in 2006. Israel, Jordan and China accounted for about 16% while the United States, Spain, Brazil, Chile, Vietnam and the United Kingdom accounted for the rest.
The world potash industry has not experienced a reasonable balance since the late 1980s, just prior to the economic collapse of the Eastern bloc countries. Average industry operating rates were exhibiting a slow but steady upward trend that ended abruptly in 1989. The average world operating rate, which had climbed to 83% by 1988, declined steadily to only 56% in 1993. Major consumption declines of about 5.2 million, 2.3 million and 1.6 million metric tons, respectively, occurred in the former USSR, Eastern Europe and Western Europe during the 1988-1993 period. The decline in the Eastern bloc was directly related to the political, social and economic turmoil that this region was experiencing. The decline in Western Europe was related to the worldwide economic recession of the early 1990s and to the Common Agricultural Policy. The reduction in Eastern European demand after the collapse of the USSR was gradually compensated by the emerging markets and also by the demands of a growing global population.
During 2006–2011, a significant improvement in the world supply/demand balance is expected as demand from China, Brazil and India improves. The world economy is also showing signs of steady recovery and global GDP is expected to be above 4.8% in the near future. With a steady improvement anticipated for world consumption, particularly for developing countries, the average world industry operating rate should climb back to a satisfactory level toward the end of the forecast period. Canada, China, and Russia will be the primary beneficiaries of the revived world market and together will account for about 90% of the increased world production. Potential consumption could rise by at least 12 million metric tons per year from China, India and Brazil, taking into account their soil nutrient balance.
The following pie chart shows apparent world consumption of potash:
Potash consumption is much more broadly based than production. Significant growth is forecast for 2006–2011. Apparent consumption is calculated as production plus imports minus exports and does not include changes in inventory levels. This can somewhat obscure the actual consumption, as is often the case for Canada, where significant change in inventory levels occurs. The anticipated growth in world consumption is somewhat dependent upon the expectation of a reasonable recovery in Eastern Europe.
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