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Katchum
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Albert Sung is the author of Correlation Economics, monitoring breaking economic news on a day to day basis. He started investing in 2008 because of the economic crisis and holds a masters degree in chemical engineering. Previously, he worked several years as a process engineer at Ashland, a... More
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Correlation Economics
  • Rising Food Price Pushing Up Potash Stocks 0 comments
    Mar 18, 2014 3:38 PM | about stocks: POT

    Agriculture prices have been going up since the beginning of 2014 and I think that if this trend continues, we will see demand going up for potash, which is used for agriculture.

    The chart below monitors the food prices. You can see the recent surge in 2014. Many foods went up like coffee, sugar, even wheat.

    (click to enlarge)

    RJA agriculture

    If we chart the agriculture index RJA against the largest potash producer Potash Corp., then we get this.

    (click to enlarge)

    Food (NYSEARCA:RJA) Vs. Potash (NYSE:POT)

    We see a correlation here between food prices and potash prices. Food prices are obviously a leading indicator for potash sales and as a consequence we can say that higher food prices will push up potash prices.

    So if you want to bet on higher potash prices (because of the recent surge in food prices), then you should buy the potash companies like Yara International, Potash Corp. or Allana Potash.

    Stocks: POT
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