From the Economist:
Feeding the world has become a mouth-watering opportunity
FOR thousands of years farmers would try to ensure a decent harvest with exhortations to various deities. The weather may still be in the lap of the gods but the fecundity of the soil can now be improved by more down-to-earth means. The run-up in the price of fertiliser, which reached a peak along with most agricultural commodities in 2008, gave a taste of the money to be made by feeding the world. A recent flurry of takeovers suggests that fertiliser companies see the subsequent drop in prices as a buying opportunity before the next ascent begins.
The biggest deal so far this year was unveiled on February 15th. Yara, a Norwegian fertiliser-maker, agreed to pay $4.1 billion for Terra, an American company. The deal will extend Yara’s lead as the world’s biggest maker of nitrogen-based fertiliser. Vale, a huge Brazilian mining company, has put up $4.8 billion for two recent purchases. These will boost its phosphate- and potash-based fertiliser businesses, which serve Brazil’s vast and growing agricultural sector.
BHP Billiton, the world’s biggest mining company, has also added bulk to its potash operations. In January it paid $320m for Athabasca Potash, a Canadian business situated near a mine it owns in Saskatchewan. In a decade the combined sites could churn out 8m tonnes of potash annually, twice the output of the world’s largest mine and equivalent to a just under a sixth of global consumption. Such is the allure of potash that rumours last year suggested that Vale or BHP might bid for a big global fertiliser company such as America’s Mosaic or PCS of Canada....MORE