...Given the “dust bowl” droughts now gripping countries that make up almost two thirds of the worlds breadbasket – the U.S., many countries in South America, Australia, China and parts of Canada, the price of food staples – wheat, rice, corn, soybeans etc, will continue to rise.
“The whole global picture is flagging up signals that we’re moving out of a period of abundant food supply into a period in which food is going to be in much shorter supply,” says Henry Fell, chairman of Britain’s Commercial Farmers Group.
If we’re hit by a particularly bad harvest or if a severe El Nino strikes, food supplies could get totally out of control in many countries.
The Ghost of Thomas Malthus
The U.N. calls the global food crisis a “silent tsunami” and faith in the ability of local and global commodity markets to fill 6.6 billion bellies, never mind the projected 2.7 billion more by 2050 (U.N. projections say the world’s population will peak at 9.3 billion in 2050), has been shaken.Are the words of Thomas Malthus coming back to haunt us?
Going forward there are circumstances that are going to greatly impact the availability of arable land and commodities demand. One of the greatest threats facing us is the loss of arable land that was used for food production. Land is being used for production of bio-fuels, topsoil is eroded away by wind and water and the agriculture land base is being paved over as we become more and more urbanized....
..Below are four potash plays. All four should be of interest to anyone looking to invest in this sector.
Amazon Mining Holding plc (AMZ/TSX-V)
Shares outstanding: 28,373,231
Warrants (C$1.55, expires: November 09): 7,650,000
Cash Available: C$8.5M
Share Price: C$1.26 (02/07/09)
Market Cap: C$36M
Management and Board Interest: 15%
Amazon’s potash in Brazil has an almost unique twist – it’s at surface. This deposit, if developed, would be an open pit mine. That should mean dramatically lower capital costs than the deep potash mines of Saskatchewan, Canada.With only 28 million shares out there is a lot of leverage in the stock. Having a small float they can raise money without shareholders suffering too much further dilution.
Amazon’s proposed product is called Thermopotash and they have an agreement with ArcelorMittal to fund argonomic tests. While the deposit does not yet have a resource, the potash is known to cover an area measured in kilometers, it grades around 10% potash.
Potash One Inc. (KCL/TSX)
Shares Outstanding: 77,132,424
Fully Diluted: 102,234,486
Share Price: $2.35
Market Cap: $180-million
Cash: $40-million
Potash One is the acknowledged leader among the junior potash companies; they might own the first potash mine built in Saskatchewan in 40 years....MORE
