The potash market managed to weather the Covid-induced storm that plagued many of the world’s commodities in 2020, and robust demand has pushed potash prices higher and higher in 2021.
Bullish sentiments in the potash industry has major market participants such as BHP (NYSE:BHP,ASX:BHP,LSE:BLT) investing billions in new potash production.
That’s welcome news for the sector — many potash-mining operations have closed in recent years, and some are waiting on the sidelines for better days and improvements in the potash price.
“World potash consumption was estimated to have been about the same as in 2019 at about 41 million tons of K2O,” according to the US Geological Survey (USGS). “Asia and South America were the leading consuming regions. World consumption of potash was projected to increase slightly in 2021, with Asia and South America as the leading regions for growth.”
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The USGS states in its latest potash market summary that in world potash production increased, owing to increased output in Canada and Russia. On top of this increased potash production, by 2023 the nations of China, Jordan and the UK are expected to contribute another 7 million MT to global potash supply.
The US Geological Survey estimates that global annual potash production reached 43 million MT in 2020. So, what were the top potash countries by production in 2020? Read through the list below to find out the answer.
1. Canada
Mine production: 14 million MT
Canada is the world’s largest potash producer, with potash production in 2020 growing by 1.7 million MT over 2019 production levels.
Nutrien (TSX:NTR,NYSE:NTR), the largest potash company, is based in the Canadian prairie province of Saskatchewan. The company is the result of a 2018 merger between two crop nutrient companies, Potash Corporation of Saskatchewan and Agrium. The partnership has “created a global agricultural giant” valued at nearly US$44 billion.
2. Russia
Mine production: 7.6 million MT
In 2020, potash production in Russia was up from 2019’s output of 7.34 million MT, helping the country to overtake Belarus as the world’s second largest potash producer. Uralkali is Russia’s premiere potash company, as well as one of the world’s leading potash producers, accounting for roughly 20 percent of the world’s potash supply. The company has five mines and seven ore treatment and processing mills.
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3. Belarus
Mine production: 7.3 million MT
Potash production in Belarus dropped slightly by 50,000 MT from 2019 levels to total 7.3 million MT in 2019. Output in the Eastern European country has been on an upward trajectory since 2016, when its potash production total came in at 6.4 million MT.
Belarusian Potash Company is the country’s largest industry operator. Since Uralkali (MCX:URKA) pulled out of Belarusian in 2013, its former partner, state-owned Belaruskali, has had a rocky road to recovery. Belaruskali has six mines and four processing factories.
4. China
Mine production: 5 million MT
Potash production in China has remained relatively the same from 2016 to 2020, at around 5 million MT. Potash is extremely vital in China — the country is the largest consumer of potash fertilizer, accounting for approximately 20 percent of world potash consumption. China’s domestic demand for potash fertilizer is overtaking its homegrown potash supply, making the country reliant on potash imports, especially for muriate of potash.
5. Germany
Mine production: 3 million MT
In Germany, potash production has remained relatively stable, ranging from 2.7 million MT to 3 million MT between 2016 to 2020. K+S (ETR:SDF) is one of Germany’s leading potash miners and has a number of projects, operating six mines in three districts of Germany.
6. Israel
Mine production: 2 million MT
Annual potash production in Israel has remained unchanged for the past few years, totaling 2 million MT since 2017. The country is sixth in terms of potash production, and it also hosts the world’s sixth largest potash-producing company: Israel Chemicals (TLV:ICL).
The company produces roughly a third of the world’s bromine, which is often extracted from the same salt water and brine deposits that produce potash.
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7. Jordan
Mine production: 1.5 million MT
Potash production in Jordan decreased marginally from 2019 to 2020. Arab Potash Company, located in Jordan, is the eighth largest producer of potash by volume, and is the sole producer of potash in the Arab region. It has helped make Jordan a key potash supplier for India and Asia.
Both Israel and Jordan recover potash from the Dead Sea.
8. Chile
Mine production: 900,000 MT
Chile recorded production of 1.2 million MT of potash in 2018, the same as the prior two years; however, production dropped below 1 million MT in 2019 and has slipped another 50,000 MT in 2020. One of the largest producers of potash in the country is SQM (NYSE:SQM), which is also a leading producer of lithium. South America in general is a large consumer of potash.
9. Spain and the United States
Mine production: 470,000 MT
Both Spain and the United States have tied for ninth largest potash producing country.
Spain remained in ninth place for potash production in 2020, although its production slipped by 30,000 MT from 2019’s output. This figure is down from 2016, when the country produced 670,000 MT of potash. Spain has potash reserves of 68 million MT. The company Geoalcali has a few potash projects in Spain, including Izaga, Muga and Sierra Del Perdon.
The US bumped the UK from the 10th spot on the list in 2017, and continued to hold onto the spot in 2018 and 2019. Potash production in the US mostly takes place in New Mexico and Utah — New Mexico has three mines operated by two companies and Utah has three potash operations.
The country put out 470,000 MT of potash for 2020, a relatively steep drop from 2014, when output totaled 850,000 MT of potash. US potash goes largely to the fertilizer industry, which in turn uses the fertilizer to increase crop production and crop yield, as well as to improve soil health and water retention in crops. Any leftover potash output is used in the chemical and industrial sectors.
10. Laos
Mine production: 400,000 MT
The Southeast Asian nation of Laos rounds out the top ten potash producing countries. The Thagone potash mine in the northern province of Vientiane is one of the country’s largest potash reserves.
Laos’ potash industry is expected to benefit from China’s plan for a pan-Asian railway and road network.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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