The Rising Influence of Rising Affluence

[DewDiligence]

BHP’s POT bid falls right in with The Global Demographic Tailwind. From today’s NY Times:

http://www.nytimes.com/2010/08/19/business/19potash.html

Rising standards of living and development in China, one of the world’s largest consumers of fertilizer, and India are putting increasing pressure on farmers to produce more crops from a declining amount of agricultural land. Their most effective solution for increasing yields is commercial fertilizers from Potash and other fertilizer makers.

“Potash, for all intents and purposes, is food,” said Vincent Andrews, the agriculture analyst for Morgan Stanley. “Because without potash, you are not making corn and soybean, and without corn and soybean, you are not making chicken or beef, and that’s what people want to eat.”

The point is not just that people want to eat chicken and beef, but also that large numbers of people in the emerging middle classes will for the first time be able to afford to do so.