The potash price has been on the decline since 2013′s cartel breakup between Russia and Belarus, but the amount of potash on the world market is still expected to increase over the next few years.
Specifically, the US Geological Survey (USGS) sees global potash production capacity reaching 61 million MT by 2019, up from 52 million MT in 2015. That’s caused trouble for larger potash producers like Potash Corporation of Saskatchewan (TSX:POT) and Intrepid Potash (NYSE:IPI). The former was forced to shut its Picadilly mine in New Brunswick earlier this year, while the latter saw its share price drop by 50 percent following the release of disappointing 2015 financial results.
Still, demand for the fertilizer is expected to increase over the long term. In 2015, the world consumed 35.5 million MT of potash, and that number should grow to 39.5 million MT over the next four years.
With those figures in mind, it’s interesting to take a look at which countries produced the most potash in 2015. Here’s an overview of the 10 top potash-producing countries that year, as per figures from the USGS.
Mine production: 11 million MT
Canada’s potash production remained flat between 2014 and 2015 at 11 million MT.
The country is home to the world’s largest fertilizer company by capacity, Potash Corporation of Saskatchewan, or PotashCorp. However, the company has recently been forced to shutter two of its potash mines in Canada due to low prices.
Mine production: 7.4 million MT
Russian potash production also stayed fairly flat from 2014 to 2015, rising an estimated 20,000 MT to 7.4 million MT. The country is home to some of the world’s largest-known potash reserves.
Last year, Industrial Minerals reported that Industrial and Commercial Bank of China and China Construction Bank engaged in a loan deal worth over $500 million with Russian potash company Uralkali (OTCMKTS:URAYY). The move gave China greater control over global potash production, as Uralkali is responsible for 20 percent of the world’s potash output.
Mine production: 6.5 million MT
Belarus boosted its 2015 potash production to overtake China as the world’s third-largest potash producer last year. It put out a total of 6.5 million MT of potash for the period.
The country has historically been a major player in the global potash market. In 2014, marketing agreements between Belarusian and Russian producers dissolved, according to the USGS. This shift lessened potash producers’ collective bargaining power, and contributed to the recent decline in the potash price.
Mine production: 4.2 million MT
China has an immense need for potash, and the country produces a significant amount of the substance at home. Demand far outstrips supply, however, and the country remains a net importer of potash. That gives the Asian nation incredible control over the market value of potash. Traditionally, Chinese potash buyers make deals with global suppliers in February of each year. These agreements set the tone for the potash price throughout the year.
Chinese potash production dropped slightly in 2015, coming in at 4.2 million MT relative to 4.4 million MT of production for the country the year prior.
Mine production: 3 million MT
Potash production in Germany stayed steady at 3 million MT in 2015, but the country remains a top five producer overall. K+S (ETR:SDF), the largest potash producer in Europe, is located in Germany, and maintains a variety of projects spread throughout Europe.
K+S warned of significantly lower profits in the first quarter of 2016 due to low potash prices.
Mine production: 1.8 million MT
Israel is home to Israel Chemicals (TLV:ICL), the world’s sixth-largest potash producing company. The company recently entered into an agreement to supply China with 1.1 million MT of potash in the coming year. That move represents a continuation of China’s efforts to consolidate its control of the global potash industry and ensure supply can meet domestic demand.
Israel’s potash production remained constant for 2015, rising just 30,000 MT to 1.8 million MT.
Mine production: 1.25 million MT
Arab Potash Company is the largest potash producer in Jordan, and extracts potash from the Dead Sea. PotashCorp holds a 28-percent stake in Arab Potash Company, which makes it the company’s largest shareholder. Jordan is a key potash supplier for India and Asia.
Mine production: 1.2 million MT
South America is a major potash consumer, with high demand from both Brazil and Chile, though Chile’s production of the substance far outstrips that of its northern neighbor.
One of the country’s largest producers, Sociedad Quimica y Minera de Chile (NYSE:SQM), came under fire last year for activities related to political campaign funding. PotashCorp owns a 32-percent stake in the company, and withdrew its board members from the organization in the wake of the news, according to Bloomberg.
9. United States
Mine production: 770,000 MT
Total potash production for the US was worth $680 million in 2015, and came mostly from Southeastern New Mexico and Utah. The country put out 770,000 MT of potash for the year, a relatively steep drop from 2014, when it put out 850,000 MT of the mineral. The center of US potash production is New Mexico, where four mines are operated by two companies; Utah also has three potash operations. Michigan’s only potash operation has now closed.
US potash goes largely to the fertilizer industry, with leftover output finding its way to the chemical sector.
Mine production: 700,000 MT
Finally, Spain beat out the United Kingdom to become the world’s 10th-largest potash producer in 2015. The country holds an estimated 20 million MT in potash reserves.
This is an updated version of an article first published on Potash Investing News on May 10, 2015.