Think you're worried about potash?...

The Chinese are really worried.

But, as with oil, potash deposits are not evenly spread. A handful of nations – led by Canada, Russia, Belarus and Israel – command the bulk of the reserves. Eight companies control more than 80 per cent of global supply. Two marketing groups – Canpotex for North American producers and BPC for the Russian and Belarusian groups – dominate the global trade.
The concentration of supplies is driving concern about a tight and politically charged market. “If BHP buys PotashCorp, is it the end of Chinese agriculture?” runs a breathless headline on the website of the China Business Journal. The accompanying article argues that Chinese control of the industry would boost the country’s agriculture and “great causes” – but, if the miner bought the Canadian producer, it would gain control of the potash market and its pricing system.
Other countries are watching the battle closely, from India, the second-largest importer of the mineral; to Brazil, a key exporter of agricultural commodities that relies on overseas fertiliser supplies. But it is in China, where grain markets are managed closely to ensure farmers keep producing in sufficient quantities to feed the growing population, that concern seems greatest. Few countries take grain self-sufficiency quite so seriously – indeed, it was one of the promises on which the Communist party came to power in 1949.
Maintaining that promise depends in part on potash, the only fertiliser in which China is seriously deficient. The country, which feeds 20 per cent of the world’s population using just 7 per cent of global arable land, has huge fertiliser needs.
China, while it produces a small amount of potash, has to import about half of its needs, a dependency that “may become a major threat to China’s fast-developing national economy and long-term strategic needs”, according to the Chinese Academy of Social Sciences, a think-tank that advises the government. Little surprise, then, that its primary importer of the mineral, Sinochem, says it is paying “close attention” to the PotashCorp battle, suggesting the group could launch a counterbid.
In contrast to the drive to make energy and metals acquisitions in Africa, Asia and elsewhere, the country’s agricultural sector has historically stayed out of the global limelight. But as China struggles to meet its food sufficiency targets, and as fertiliser markets tighten, that is changing. The government has quietly encouraged state-owned agricultural companies to go abroad. Cofco, the grain trader, and Sinochem, the chemicals group, have been hunting for overseas agricultural deals, though with mixed success. [More]

If the BHP takeover attempt is hard to forecast as far as implications for potash production and pricing, think about a Sinochem acquisition.  Even more perverse will be the situation that a major revenue source for a Canadian province will be a huge foreign-owned company.

Is it me, or does that make for weird global politics?