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BHP's bid for Potash Corp. has not yet been approved, but the Chinese market has already felt the impact. Prices of potash are rising fast. Experts say Chinese farmers will suffer from the price hike.
Many Chinese farmers who traditionally use potash as fertilizer have been cutting back this year. The reason is simple. The price has doubled.
One farmer said "Potash is too expensive this year. We can not afford it."
One farmer said "We used to add potash as fertilizer. Now we can not add it any more, it is too expensive."
Potash is an important fertilizer for plants. It helps crops grow, raises resistance to cold temperatures and diseases, and it improve outputs. But experts are finding out that many farmers have stopped using it as potash prices have risen in recent years.
Wang Ruijiang, Dean of Chinese Acedemy of Geological Science said "The green line represents China's reliance on imports of potash. It greatly dropped from 2003 to 2007. It does not mean farmers' demand fell, but because global potash prices rose, farmers can not afford to use it any more."
China has huge demand for the resource and 70 percent of its consumption relies on imports.
But global output is dominated by several producers, causing the hike in recent years. Experts are concerned that if BHP wins the bid for Potash Corp, prices will rise even faster, greatly affecting millions of Chinese farmers.
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