Fertilizer Cartel Driving Up Food Prices?

An interesting post by IATP's Think Forward blog points to a law suit filed in Minnesota charging a global fertilizer cartel is driving up prices.

So farmers are paying more for fertilzer, or planting less (in developing countries) because they can't afford the stuff. Either way, it contributes to higher food prices. Here's what happened:

A small Minnesota-based company, Minn-Chem Inc., charges that seven companies in the United States, Canada, Russia and Belarus conspired to fix global prices for the fertilizer potash.

Potash includes mineral and chemical salts that contain potassium, and is widely used around the world as a fertilizer to increase crop yields. Over half of the world’s global capacity is located in just two regions: Canada and the former Soviet Union (Russia and Belarus).

So maybe there is an OPEC for fertilizers, but energy prices are a big factor too, since natural gas is used to make synthetic fertilizer. Put that together - with higher fuel prices in the whole food chain - and you get a pop in food prices that will likely last.

Nevermind the way biofuels are also eating away at supply and pushing food higher -- an increasingly controversial issue among multinationals.

Comments

[Organic George]

Believe it or not there were some hedge funds that we also players in the fertilizer, feed & grain storage business. They were pushing up stock prices to support their "hedged" physicals.

There are going to be some unbelievable books written about this time in history.