dinsdag 6 mei 2014

Arbitrage opportunity in agriculture

At this moment there is an interesting arbitrage opportunity for investors in the agricultural space.

When we look at the potash price we see the following trend downwards. Ever since the break-up of the potash cartel between Uralkali and Belarusian Potash Company in July 2013, we have seen a drop in potash price from 400 USD/t to 300 USD/t (see chart below from InfoMine.com).

Normally, the potash price follows the food price, because the food price is a leading indicator for the potash price. I have noted this correlation here. So you would expect that the potash price would get some momentum upwards since food prices have soared almost 20% since the start of 2014 (see chart of RJA below from Google Finance, which represents agricultural prices).


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