For the Arabian Gulf states, heavily dependent on food imports, the Byzantine manoeuvrings in the potash industry could spell relief from steadily rising prices.
Potash is not a particularly glamorous mineral, but plants love it. It is essentially a fertilizer form of the element potassium, and is vital to organic life. Potash can turn sterile desert into fields of green. Countries such as Jordan that have large deposits of the mineral have used it to create agricultural industries that simply could not exist otherwise.
It was also, until recently, controlled by a handful of companies that jealously guarded its price and ensured farmers paid a hefty premium for it. That, however, is about to change. In late July, the Russian fertilizer giant Uralkali set in motion one of the biggest setbacks to hit mining in years. It pulled out of its trading partnership with the Belarus potash producer Belaruskali, a cartel-like arrangement that had the same effect on the global fertilizer market as Opec does on the price of oil. Together, they controlled 70 per cent of the potash market.
The Russians wanted price stability, but Belarus, which draws up to 20 per cent of its national income from the cartel, wanted higher prices. The tension came to a head in July when Russia accused Belarus of selling product outside the cartel.
Uralkali left no doubt what the effect of exiting the cartel would be: it said it expected the price of potash to fall 25 per cent, to around US$300 a tonne. Belarus’s response was to invite Uralkali’s chief executive, Vladislav Baumgartner, to Minsk for talks – and then arrest him moments after his feet hit the tarmac. He is still languishing under guard in the Belarus capital.
As potash accounts for up to 25 per cent of farming input costs, the knock-on effect on food prices from these events is significant.
Up to now, many farmers, especially in emerging nations such as India – also a significant supplier of food to the Arabian Gulf – have simply done without. This has led to lower harvests and higher prices.
“Demand growth has been stemmed by pricing behaviour in recent years ,” says Paul Burnside, manager of fertilizer analysis products at CRU, a London-based consultancy. The break-up of the cartel should lead to a price fall, with farmers standing to benefit. “This move should allow demand growth to return,” Mr Burnside notes.
Lower potash prices should put downwards pressure on food prices – good news for Gulf countries. In a report in May, Alpen Capital warned that the region was vulnerable to food price shocks.
The end of tight price management over a vital food input will reduce that risk.
Gulf states also stand to benefit in another way. Price competition should stimulate potash demand, and with it, investment in the sector – especially in emerging producers in Africa. Countries such as Ethiopia are eager to develop unexploited potash reserves.
“African projects have relatively modest capital expenditure, and also pretty good operating expenditure, when you factor in the cost to deliver to target markets,” Mr Burnside says.
In recent years, Gulf companies have acquired large tracts of land in Africa as a hedge against food insecurity. To produce the fertilizer for these farms, a number of potash mining projects are under way across the continent.
One such project is being run by Allana Potash, a Canadian junior developing four concessions in Ethiopia’s north-eastern Danakil Depression. The $642 million project stretches over 312 square kilometres. Work on the development is forging ahead and production is set to begin within two years, said Richard Kelertas, Allana’s senior vice president of corporate development.
“We are full steam ahead,” Mr Kelertas said. “As a very low cost producer – by 2015 – we are in very good shape and well positioned to get our project fully financed and built.”
Other emerging markets are also set to benefit. “This likely will kick-start a positive demand response out of India, China and in many other regions” Mr Kelertas said.
For Ethiopia, the stakes are especially high. Once the symbol of African deprivation and want, it now has a thriving, if tiny, economy. The country depends on agriculture but the government is eying mining – currently less than 1 per cent of GDP – as a central plank to development. Potash shows plenty of potential.
“The deposits in the Dankhil Depression are likely the lowest production cost deposits on Earth because the extremely hot and dry climate is ideal for solution mining,” says the University of Michigan’s Gabe Collins, a researcher into Ethiopia’s trade links with China. “To boot, the area appears to have a rechargeable aquifer that can sustain mining operations.”
Mr Collins says that Ethiopia could become the world’s cheapest source of potash. It is also the closest large volume seaborne supplier to India, China and emerging African agricultural markets – all major food sources for the Gulf. With proper rail infrastructure it might be possible to deliver potash to global markets such as Brazil – another big buyer – more cheaply than Uralkali can from its mines in the Russian interior, he notes.
With ample fertilizer reserves and an eager market on its doorstep, Ethiopia is in a position to shrug off its image as a symbol of world hunger, and help feed the world instead.
business@thenational.ae
Stage 2
1. Mathieu van der Poel (NED) Alpecin-Fenix 4:18:30
2. Tadej Pogacar (SLV) UAE Team Emirates 0:00:06
3. Primoz Roglic (SLV) Jumbo-Visma 0:00:06
4. Wilco Kelderman (NED) Bora-Hansgrohe 0:00:06
5. Julian Alaphilippe (FRA) Deceuninck-QuickStep 0:00:08
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NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
if you go
Fire and Fury
By Michael Wolff,
Henry Holt
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UAE currency: the story behind the money in your pockets
AIR
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
TALE OF THE TAPE
Manny Pacquiao
Record: 59-6-2 (38 KOs)
Age: 38
Weight: 146lbs
Height: 166cm
Reach: 170cm
Jeff Horn
Record: 16-0-1 (11 KOs)
Age: 29
Weight: 146.2lbs
Height: 175cm
Reach: 173cm
Fixtures
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At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
England squad
Moeen Ali, James Anderson, Jofra Archer, Jonny Bairstow, Dominic Bess, James Bracey, Stuart Broad, Rory Burns, Jos Buttler, Zak Crawley, Sam Curran, Joe Denly, Ben Foakes, Lewis Gregory, Keaton Jennings, Dan Lawrence, Jack Leach, Saqib Mahmood, Craig Overton, Jamie Overton, Matthew Parkinson, Ollie Pope, Ollie Robinson, Joe Root, Dom Sibley, Ben Stokes, Olly Stone, Amar Virdi, Chris Woakes, Mark Wood
Mountain%20Boy
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The bio
Favourite book: Peter Rabbit. I used to read it to my three children and still read it myself. If I am feeling down it brings back good memories.
Best thing about your job: Getting to help people. My mum always told me never to pass up an opportunity to do a good deed.
Best part of life in the UAE: The weather. The constant sunshine is amazing and there is always something to do, you have so many options when it comes to how to spend your day.
Favourite holiday destination: Malaysia. I went there for my honeymoon and ended up volunteering to teach local children for a few hours each day. It is such a special place and I plan to retire there one day.
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
