Posted by Joshua Mayfield with Hallgarten + Co. – Growth Minerals Sector Review
Potash prices recovered in 2024 from the exorbitant highs and lows following price volatility in 2022-2023. Southeast Asian buyers, notably Indonesia and Malaysia, took up a bigger market share from the major players to keep the potash supplies moving to the East of Suez. This occurred during higher potash supplies to China, which prompted ICL Group’s three-year deal to supply China with 2.5 million metric tons of potash from 2025-2027. Nutrien Ltd also reported higher potash sales volumes to China, which increased from 9% to 13% of the company’s potash sales in Q4 2024.
Brazil continues to be the most important market for potash supplies, but with all the changes happening there in greenfield and brownfield fertilizer projects (see our previous Potash Sector Review), the major potash players are looking to the East of Suez to crowd out the space before others start looking there. For example, the top three potash suppliers to China—Canada, Russia and Belarus—were also the top three suppliers to Indonesia and Malaysia in 2024. The higher demand for MOP in those countries has been attributed to higher palm oil output because of the biodiesel sector. This will likely see higher volumes of MOP to Indonesia, Malaysia and India in 2025. However, this is not only a story about the higher potash volumes to Southeast Asia markets in 2025.
The evidence of a fierce competition for these new in Southeast Asia markets in 2024 revealed that Canada must go up against a Russia-Belarus tag team of potash supplies. In a wrestling match, tag-teams usually tag out for their partner when they have either become exhausted or have lost their edge against an opponent. This fight for Southeast Asian markets is a case in point, since Canada sells its potash supplies through the Canpotex joint venture with The Mosaic Company. Canpotex signs long-term agreements with key potash markets in China and India, but it had to tag out several times when going up against Belarus and Russia in Southeast Asia. Not to mention the railroad strikes in Canada which made Canpotex potash sales to Southeast Asia inconsequential from September 2024—there were literally zero (0) Canpotex MOP exports to Indonesia in the month of September 2024.
Meanwhile, massive potash mine in Laos is sinking into the abyss. Chinese investments into the Laos potash space have turned this country into one of the world’s largest reserves for potash. This had been celebrated as a key success for the Belt and Road Initiative (BRI) in Southeast Asia—rice supplies are the main issue for food security—until they have aggravated a lot of villagers recently! The potash sinkhole was discovered in Lao’s Pak Peng village in early December of 2024. China was immediately blamed for the cause of this disaster.
Mining operations were halted while Sino-Agri International Potash Co. Ltd, operator of the potash mine, dealt with the problem of filling up the sinkholes with dirt. China already has ambitious BRI plans for a potash fertilizer industrial park in Laos. This would be unprecedented for the potash sector.
Let’s not go out on a limb here. Investments in Laos potash industrial parks will not disrupt global potash markets. China will be dependent on potash supplies from the biggest players in the sector. It remains a mystery where Laos is going to fit into the global potash market scenarios. Even a stone’s throw away from Indonesia and Malaysia will not make Laos potash more competitive than Canada, Russia or Belarus in the East of Suez.
Ottawa and Washington DC are at each other’s throats due to Trump’s tariff threats on Canadian potash. Nutrien Ltd shared these concerns with an audience at the BofA 2025 Global Agriculture & Materials Conference. It has been claimed that 85% of American farmers import potash from Canada. This is a major concern for Nutrien shareholders, but also the global market for potash supplies in the near term. Any reduction in potash imports from the US will influence prices. The government of Saskatchewan sent a mission to Vietnam and Singapore to address leaders of the Association of Southeast Asian Nations (ASEAN) to promote sustainable food security.
China is the top concern for potash supplies in the short term. Uncertainty around China’s agricultural seasons will be on the radar of Canpotex, as well as the reality of Trump’s tariff threats on Canada. Canpotex will have to increase its maritime shipping capacity to meet this supply disruption from China and Southeast Asia. Otherwise, Canpotex will have no choice but to tag out of the match. Russia and Belarus are poised to grab more of the global market share because sanctions do not apply to the East of Suez markets.
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