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fertilizer recommendation in the australian

  1. 3,048 Posts.
    Hat tip to HotD. Here is the full article on fertilizer.

    "All aboard the fertiliser bus as it prepares to accelerate
    PURE SPECULATION: Robin Bromby From: The Australian January 04, 2010

    JIM Rogers, once George Soros's partner and now probably a frequently quoted commentator on resources -- one news report referred to him as a "commodities guru" -- is very bullish about the outlook for almost all of the sector.
    But there was a television interview he did a few weeks ago which has stuck in our mind, and two points from that are worth thinking about as we contemplate the coming year, significant because 2010 will round off the first decade of the new millennium come next December 31 (please note all those who can't count and have already summed up the decade).

    The first point Rogers made was to continue to be bullish about gold. He cited a recent commodities conference in Prague which he addressed, and during which he asked the 300 "heavy hitters" (as he described them) to put their hands up if they had ever owned gold. Only about a quarter had, a response that obviously astounded Rogers. The point: it shows just how big an untapped market remains among the high net worth types for gold.

    Start of sidebar. Skip to end of sidebar.
    Related CoverageMeridian in cherry-picking mood The Australian, 20 Dec 2009
    Buy on the rumour, sell on the news The Australian, 10 Dec 2009
    Potash ready to roll The Australian, 8 Dec 2009
    Demand for crop nutrients recovers The Australian, 6 Dec 2009
    Resources volumes ease The Australian, 22 Nov 2009
    .End of sidebar. Return to start of sidebar.
    The other point was his belief that the best investment lies in agricultural commodities. Rogers believes there will be a global food crisis within five years. Food prices have to go up because, without higher farm incomes, it will be hard finding enough people to work the land. He was astonished that even last year, when there were rice shortages, agricultural commodity prices remained depressed.

    Gold we have talked about quite enough for now. But it remains frustrating that Australians have few chances locally to weight their portfolios with agricultural commodities plays.

    The only significant opening is the fertiliser feedstocks, potash and phosphate, and they have been a big disappointment of late. On Thursday, regional Canadian newspaper the Regina Leader-Post dubbed potash as its business story of the year. Well, it would, wouldn't it?

    Saskatchewan is responsible for 30 per cent of the world's potash supply, but instead of the commodity breaking through $US1000/tonne, as had been predicted, it fell below $US400/tonne. China and India, some of the world's biggest importers, have been determined to break the North American stranglehold and are looking elsewhere.

    The Indians have negotiated a $US460/tonne contract price. Now we hear that Belarusian Potash will sell China 1.2 million tonnes next year at an extraordinary $US350/tonne.

    Phosphate has had a similar downward ride. But we see that the sector leaders are pressing on. Minemakers (MAK) has begun trial mining at its Wonarah phosphate project in the Northern Territory and Phosphate Australia (POZ) has been getting some very positive results from metallurgical testing at its Highland Plains project northeast of Wonarah.

    On the bright side, the US potash producer Mosaic Co is sounding bullish about fertiliser sales in 2010 as farmers need to boost nutrient levels. The potash crisis was partly caused by the North American suppliers -- they thought they had enough market leverage to charge whatever they wanted. The price collapse has more to do with that over-reaching than the long-term future of agriculture.

    Food is going to become an issue, just as uranium did after years in the doldrums. Remember back in 2003 and uranium was $US7/lb? What if you had bought Paladin Energy (PDN) then when the shares were worth a few cents?

    What if you didn't? Five years from now, like those who waved away the Paladin story, investors may be regretting missing the fertiliser bus."
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