A fun look at inflation
Are today’s inflation-adjusted prices affordable?
Tickets to the 1975 World Series Game – Game 6: Price $7.50
This game is always mentioned as one of the greatest games in World Series History.
Four-Day Pass to the 1985 Masters: Price $75
Bernhard Langer won and all Top 10 finishers are in the PGA Hall of Fame.
Tickets to the 1991 World Series: Price: $45.
Most Braves fans prefer to remember 1995.
Standard Grade Muriate of Potash (MOP), FOB Vancouver in USD.
February Price Levels:
1988 ($88pmt)
1998 ($125pmt)
2008 ($375pmt)
2018 ($230pmt)
2024 ($240pmt)
Source: Argus Media.
Excluding the extreme events in 2008, Covid-19 and the geopolitical disruptions in 2021-2022, MOP has increased about 3.5% per year, generally in line with inflation. If all the other events above had a similar 3.5% inflationary increase, prices might still be very reasonable for the average fan:
A World Series ticket at Fenway Park today would cost approximately : $52
A Four-Day Pass to the 2024 Masters : $287
A World Series ticket to see the Braves win in 2024 : $140
Conclusion: Potash at $240 seems quite affordable.
The Changing MOP Market
The order is rapidly fadin'
And the first one now
Will later be last
For the times they are a-changin'
Bob Dylan
The Muriate of Potash (MOP) market has changed a lot in Thailand over the last 15 years. MOP contracts in the past have been limited to a select group of well-financed, major importers in any one country.
In 2013, the Uralkali and Belaruskali (BPC) coalition separated. The period briefly opened the market for new importers and changed MOP purchasing patterns.
Around 2017, SQM limited MOP production from Chili to focus on the more profitable lithium and potassium nitrate markets.
Belarusian authorities diverted a plane in May 2021 en route to Lithuania carrying journalist Roman Protasevich to Minsk. The incident had wide-reaching implications and led to sanctions against Belarus from many countries.
Soon thereafter, Lithuania terminated the railway transport agreement with BPC thus denying access to the port at Klaipeda. With exports restricted, BPC was forced to alter trade routes.
In February of 2022, the conflict between Russia and Ukraine commenced. Restrictions and sanctions soon followed on Russian potash. MOP trade flows were again disrupted.
In May of 2022, MOP was hitting new highs not seen since 2008. Prices reached $1,100 per metric ton CFR on supply tightness and port congestion from the aftermath of Covid-19.
Since October 2023, Dead Sea Works (DSW) and Arab Potash Corporation (APC) have had Red Sea transit routes disrupted by the conflict in Gaza. Cargoes diverted around the Cape of Good Hope have further increased logistics costs and port congestion worldwide.
As of 17 June 2024, the threat of unionized port workers at the Port of Vancouver currently looms over Canada’s largest port.
The Rise of Laos
One of the big stories in MOP is the emergence and growth of Laos. China has made substantial investments in Lao Kayuan and Sino-Agri Potash over the last 5 years. Both plants are in Khammouane province.
As Argus Media recently reported, Sino-Agri Potash will increase their capacity from 2 million tons per year to 5 million tons by 2025/26 and eventually 10 million tons per year. Lao Kaiyuan currently has a capacity of 1 million tons and plans to double that by the end of 2025. Deliveries to China have grown massively to 1.7m tons in 2023 from just 127,800 tons in 2020. (Argus Media, Insight Paper, May 2024, Laotian MOP supply boom: Key challenges and the need for a new Laos MOP price assessment).
Sino-Agri Potash Plant. MV Cheng Ji Hai. 1st Granular MOP Vessel from Laos to Thailand.
There are also three ongoing projects near the Laos capital of Vientiane which are funded with Chinese investment: Sino Hydro Mining (2.5m mt/year), Ruiyuan Richfield Sylvine Sole (500k mt/year) and Zangee Mining (2.0m mt/year).
In July 2023, we imported MOP from the first bulk vessel sent from Laos to Thailand, a 4,500 ton coaster from Cua Lo Port, Vietnam. Argus reported in May 2024 that Sino-Agri sent their first bulk vessel from Vietnam to Europe and this month sold their first bulk cargo (27,000 tons) of granular MOP to Brazil.
Two undeveloped MOP projects in Thailand (Chaiyaphum and Udon Thani) are currently being reviewed. Reuters recently reported that China’s SDIC (the largest SOP producer in the World) is looking to acquire 49% of the MOP mine in Udon Thani, Thailand.
With increasing supply from Laos, Eurochem and BHP’s Jansen project, there will be heightened competition, especially for importers that resell to smaller bulk blenders and manufacturers. Small plants in Malaysia will compact inexpensive Russian and Belarusian standard-grade MOP and export to Thailand via container. International traders will compete for MOP allocation from new manufacturers to the Southeast Asia markets.
The Sulphate of Potash (SOP) market will continue to grow in areas where soils accumulate too much chloride and growers learn more about chloride-sensitive crops. Agricultural byproducts, locally sourced high-quality minerals, and bio-waste projects that produce fertilizers with considerable soluble K2O content and low Chlorides will all compete as a K2O source.
For MOP times are certainly ‘a-changin’.
If MOP contains 60% K2O, what is the other 40%?
Canpotex Granular MOP
We are frequently asked this question. The chemical name for Muriate of Potash (MOP) is Potassium Chloride (KCl). However, the Chloride content is never listed on fertilizer bags.
If the chemical purity were 100%, the Potassium (K) would be 52.4% (63.1% K2O) and the Chloride (Cl) would be 47.6%.
However, the simple answer is approximately:
50% Potassium (as K) [ 50% K is equivalent to 60.2% K2O ]
48% Chloride (as Cl)
2% Magnesium (Mg), Calcium (Ca), Sodium (Na), Sulfates (SO4) and insolubles such as clay.
The logical next questions: Are Chlorides helpful or harmful to plants and soils and why isn’t the Chloride content listed on the bag?
Stayed tuned.