By matthias koster

You may be hearing all of the buzz in the financial newspapers, on TV and even around the water coolers about Potash fertilizer stocks. Many have tripled over the timeline of the past twelve months. So what is this Potash stuff exactly?

To be exact Potash is an non-pure form of potassium carbonate. It is located in few sections of the world but the capital of Potash production and resources is located in the Canadian of Saskatchewan, which is within the free world country of Canada. Potash is located deep within the ground and has to be extracted by mining out. To be exact, run of min ore is crushed into a chemical named KCI (which is potash) and is later scrubbed, dusted and thickened before turning into a end Potash product. But hey, let's push the science aside and look at it from a purely stock market standpoint.

Recently Potash Corp of Saskatchewan (POT) tripled the price of their Potash fertilizer on long term contracts to overseas customers. Can you tell me how many business' have the power to not only increase but add 200% to the price of their product? This is proof of the demand for the fertilizer.

The prior example is from the beginning of 2008. As of this current writing (June 2008) the CEO of this company has publicly come out and told investors that this is just the start. Remember, Chief Executive Officer's are for the most part held accountable by the Security and Exchange Commission for forward looking statements.

Bill Doyle, CEO of Potash

"We have a lot of pricing power. We're nowhere near peak pricing"

"We clearly aren't experiencing any demand destruction"

While Potash (POT) is considered to be the trend setter in the industry there are many other strong large cap and mid-cap potash stocks in the market place. MOS (Mosaic and Agrium (AGU) have both been able to increase their prices just as POT has.

With nations such as China witnessing over 15% inflation in food prices vs the last fiscal year, the demand for the fertilizer pushes these price increases. Simply stated, using Potash in ones crops will yield a large quantity and a higher quality of food. This is why farmers are willing to pay large sums to obtain potash, even to the point where a three fold fold increase in expense still yields a positive transaction for the agricultural farmers.

Will the potash craze continue? Nothing is certain but with the headlines by the WHO (World Health Organization) going over the high probability of wide spread agricultural shortages a product that helps to create bigger and higher quality crops is set to continue to be in high demand.