Resource World Magazine

O C T O B E R / N O V E M B E R 2 0 1 8 www.resourceworld.com 21 tion between potassium chloride and sulfuric acid. This process supplies over half of the global supply for SOP. Second to this is the double salt process, where potassium chloride is reacted with various sulfate salts. Sodium sulfate is the most common raw material in the double salt method. The benefits of SOP are wide ranging – aiding in crop qual - ity and yield but also making plants stronger by helping them to resist disease, insects, even drought and frost. It can also improve the physical quality of crops' look and taste. SOP potash is sig- nificantly more expensive than MOP potash and is the preferred fertilizer on chloride sensitive crops. It is used primarily in high value crops like fruits, vegetables and tobacco. GROWING DEMAND FOR ORGANIC FERTILIZERS AND SOP CERTIFIED ORGANIC Globally, organic cultivation is expanding rapidly with revo- lutionizing farming practices, R&D and an increasing market demand for organic certified consumable products. From a US $15 billion market in 1999, the global organic food and drink market has grown to become a US $80 billion market in 2014. The increased demand for green products is creating an increased demand for organic certified products in the entire sup - ply chain for the end products. The global demand for organic fertilizer has seen consistent growth due to end user demand bol- stered by government support. Chemical fertilizers and pesticides have significantly reduced agriculture soil quality around the world globally and to address the growing concern and demand for sustainable methods of agriculture, governments globally are creating initiatives and subsidies promoting the use of organic fertilizers. Recently, there has been a growing global awareness regard - ing food cultivation practices and consumers are becoming more aware of the quality and safety of the food they eat. People are concerned about the potential negative effects of food containing pesticides, fertilizers and drugs on their health. Organic fertilizer demand was pegged at 17 million tonnes in 2016 and the market was valued at US $5.57 billion. The market is expected to double by 2025. Growing awareness about the nutri - tional advantages of organic fertilizers will further increase the demand and supply of organic fertilizer globally. The growing customer base, as a result of the increased demand of organic fertilizer, is creating a very lucrative environment for fertilizer producers. Fertilizer demand is at the core of this growth and the increasing demand for organic certified fertilizers is now creating a significant investment opportunity. Most of the global supply of organic fertilizer is from plant based fertilizers (Examples: compost, cottonseed meal, molasses, soybean meal) and animal based fertilizers (Examples: manure, bone meal and blood meal, urea, milk, fish emulsion). Much of the supply of organic fertilizers is weather dependent; drought and flooding can significantly affect organic fertilizer production and prices. Compared to chemical fertilizers, plant and animal based fertilizers have lesser nutrient ratios which can significantly impact end crop yields making the choice to go organic difficult for cultivators. n Eric and Dennis Hoesgen are Investment Advisors with Canaccord Genuity Wealth Management, a division of Canaccord Genuity Corp, Member-Canadian Investor Protection Fund. The information con- tained in this article is drawn from sources believed to be reliable, but the accuracy and completeness of the information is not guaranteed, nor in providing it does Eric Hoesgen and Dennis Hoesgen, Canaccord Genuity Corp, or its subsidiaries, or affiliated companies, assume any liability. This information is current as of the date appearing in this article, we do not assume any obligation to update the information or advise on further developments relating to these securities. This article should not be considered personal investment advice or a solicitation to buy or sell securities. Canaccord Genuity and holdings of its respec - tive directors, officers and employees and their associations, from time to time may buy or sell any securities mentioned herein. The views expressed are those of the author and not necessarily those of Canaccord Genuity Corp. They can be reached at 604-643-0229 or hoesgens@ canaccord.com

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