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The potash market and its future prospects

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  • Rawashdeh, Rami Al
  • Xavier-Oliveira, Emanuel
  • Maxwell, Philip

Abstract

The purpose of the paper was to assess the main historical drivers of potash demand, to generate estimates of demand elasticities and to produce forecasts of potash consumption during the coming decade. The paper has used a comprehensive econometric model to estimate shortrun and long run price, income and cross elasticities. The world potash demand is found to be price inelastic in the short-run and even in the long run. Also, income, cross price elasticity and cross yield elasticity were found to be inelastic in the short and long run. Our modeling predicts that potash consumption for fertilizers will increase from 28.2 million tonnes in 2012 to around 37.8 million tonnes in 2022, which implies that the annual relative growth rate of potash consumption is expected to increase by 2.9%. As long as demand increases our prediction is that real potash prices will also increase, ceteris paribus. Delays in commissioning new production capacity are likely the main reason for price increases. Yet additional planned capacities that could potentially take place in the next decade still have the potential to limit the upside for potash prices.

Suggested Citation

  • Rawashdeh, Rami Al & Xavier-Oliveira, Emanuel & Maxwell, Philip, 2016. "The potash market and its future prospects," Resources Policy, Elsevier, vol. 47(C), pages 154-163.
    • Handle: RePEc:eee:jrpoli:v:47:y:2016:i:c:p:154-163
    DOI: 10.1016/j.resourpol.2016.01.011
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    2. Yves Jégourel, 2016. "Potash: a typical price war," Research papers & Policy papers on Economic Trends and Policies 1603, Policy Center for the New South.
    3. Yakovleva, Natalia & Chiwona, Annock G. & Manning, David A.C. & Heidrich, Oliver, 2021. "Circular economy and six approaches to improve potassium life cycle for global crop production," Resources Policy, Elsevier, vol. 74(C).
    4. Yves Jégourel, 2016. "Potash: a typical price war," Policy briefs on Economic Trends and Policies 1603, Policy Center for the New South.
    5. Ilinova, Alina & Dmitrieva, Diana & Kraslawski, Andrzej, 2021. "Influence of COVID-19 pandemic on fertilizer companies: The role of competitive advantages," Resources Policy, Elsevier, vol. 71(C).
    6. Vining, Aidan R. & Moore, Mark A., 2017. "Potash ownership and extraction: Between a rock and a hard place in Saskatchewan," Resources Policy, Elsevier, vol. 54(C), pages 71-80.
    7. Yves Jégourel, 2016. "Potash: a typical price war," Research papers & Policy papers on Trade Dynamics and Policies 1602, Policy Center for the New South.
    8. Dmitrieva, D. & Ilinova, A. & Kraslawski, A., 2017. "Strategic management of the potash industry in Russia," Resources Policy, Elsevier, vol. 52(C), pages 81-89.
    9. Al Rawashdeh, Rami, 2020. "World peak potash: An analytical study," Resources Policy, Elsevier, vol. 69(C).
    10. Yves Jégourel, 2016. "Potash: a typical price war," Policy briefs on Trade Dynamics and Policies 1602, Policy Center for the New South.
    11. Mahmuda Nasrin & Pooja Vortia & Shakila Salam & Md. Salauddin Palash, 2022. "Is fertilizer demand elastic to its own price? Assessing the consequences of fertilizer subsidy policy in Bangladesh," SN Business & Economics, Springer, vol. 2(8), pages 1-15, August.
    12. Yan, Jingchun & Shen, Laihong & Ou, Zhaowei & Wu, Jian & Jiang, Shouxi & Gu, Haiming, 2019. "Enhancing the performance of iron ore by introducing K and Na ions from biomass ashes in a CLC process," Energy, Elsevier, vol. 167(C), pages 168-180.
    13. Song, Xiaoqian & Geng, Yong & Zhang, Yuquan & Zhang, Xi & Gao, Ziyan & Li, Minghang, 2022. "Dynamic potassium flows analysis in China for 2010–2019," Resources Policy, Elsevier, vol. 78(C).

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