DEFINITION of 'Potash'

Potash, from the Dutch potaschen, meaning "pot ashes," is the common name for any of several compounds containing potassium, such as potassium carbonate (K2CO3), potassium oxide (K2O) and potassium chloride (KCl). These compounds are used primarily in the manufacture of fertilizer.

BREAKING DOWN 'Potash'

Potash refers to any mined or manufactured salt that contains potassium in water-soluble form. Potash was originally made by saturating wood ashes in water, then heating the mix in an iron pot until the liquid evaporated, leaving a white residue called "pot ash". Potash is used in fertilizers, soap, and glass and ceramics manufacturing.

Similar to potash, "pearl ash" is created by burning cream of tartar.

Potash Production

Potassium is the seventh most abundant element in our planet's crust, but it isn't found in its elemental form in nature, since it reacts with water. Rather, potassium is found in compounds. Most potash reserves are found in Canada. The Eastern European region is the number one producer of potash in the world. Together, the countries of Belarus, Canada, China, Germany, Israel, Jordan and Russia produce 90% of the world's potash. In the United States, potash is produced in New Mexico, Michigan, and Utah.

Potash can be produced a few different ways, including evaporation methods and dissolution mining. The evaporation method requires hot water to be added to the potash, which dissolves it and causes it to rise to the surface, where excess water is evaporated to create a concentrated substance. In dissolution mining, the mined potash is ground into a powder.

Potash is a useful fertilizer nutrient and offers a variety of farming benefits, including the improvement of taste, texture, color, yield and water retention in crops. Common crops that rely on potash include corn, rice, wheat and cotton, among many others.

Where is Potash Found?

Potash reserves are common in areas that used to be underwater. As the earth developed and the ocean water evaporated, the salts, a mixture of potassium chloride (KCl) and sodium chloride (NaCl) were left behind, forming potash. Over time, the earth's changing surface allowed most of these mines to be buried deep in the earth's crust, and today, most potash mines are quite deep.

History of Potash

Potash has been used since about the year 500 A.D., to help make materials such as glass and soap. The American potash industry began in the 18th and 19th centuries, when settlers cleared forests in order to plant crops. They needed to get rid of the extra wood, and the easiest way to do that was to burn any wood that wasn't already set aside for other purposes, such as fuel or building things. The wood ashes were sold either to create soap or to boil down into potash. That system, together with similar systems in other countries and regions in the world (including Canada and Eastern Europe), set the foundation for the global potash economy that exists today.

RELATED TERMS
  1. Chemicals Industry ETF

    An exchange-traded fund that invests in manufacturers of chemicals. ...
  2. Produced Water

    Waste water generated during the production of oil and natural ...
  3. Discrete Compounding

    Discrete compounding refers to the method by which interest is ...
  4. Compound Interest

    Compound Interest is interest calculated on the initial principal ...
  5. Water ETF

    An exchange-traded fund that invests in companies operating in ...
  6. Biotech Compound

    A chemical entity that forms the starting point in the drug development ...
Related Articles
  1. Investing

    Will PotashCorp Ever Make a Comeback? (NYSE: POT)

    Learn whether PotashCorp will make a comeback. Potash was in a major bull market from 2000 to 2008 before falling over 50% in 2008.
  2. Investing

    Potash Prices Tumble on Belaruskali's India Deal

    The price of potash just tumbled to its lowest level in a decade after Belaruskali announced it had signed a contract with India to deliver 700,000 tonnes of the crop nutrient at just $227 per ...
  3. Investing

    Potash Sellers Rise on Hints of Cartel's Revival

    Shares of potash producers surged higher on Thursday after the president of Belarus hinted he would be willing to have the state-owned fertilizer group Belaruskali join forces once more with ...
  4. Investing

    Mosaic Agrees Potash Market Has Hit Bottom

    Mosaic (NYSE: MOS) on Tuesday became the second major potash producer to say the market has reached a bottom, and to predict stronger demand in the immediate future. A week ago, it was PotashCorp ...
  5. Investing

    The Potash Glut Kills Canada's New Export Terminal

    The continued decline of the potash market has doomed the construction of a new export terminal in British Columbia. Canpotex, the fertilizer component marketing organization comprised of PotashCorp ...
  6. Investing

    Potash Woes Shut Down Mosaic's Colonsay Mine

    The protracted downturn in the global potash market has claimed at least its third mine this year: Mosaic (NYSE: MOS) announced recently it will idle its Colonsay site in Saskatchewan, Canada, ...
  7. Investing

    Is PotashCorp on the Selling Block?

    Shares of PotashCorp (NYSE: POT) surged 6.5% Thursday before settling down to close with a 1.3% gain after rumors the crop nutrient miner had received several unsolicited takeover offers. The ...
  8. Investing

    BHP Billiton Cuts Back on Another Commodity

    BHP Billiton (NYSE: BHP) has built up operations that span the gamut of natural resources -- iron ore, petroleum, copper, and coal -- and in 2013, moved to add a "fifth pillar": potash. It bought ...
  9. Investing

    Why PotashCorp Is Optimistic Despite Low Prices

    PotashCorp (NYSE: POT) sees a silver lining within the dark gray cloud of the recent benchmark contract China signed for potash delivery this year. That agreement prices the commodity at just ...
  10. Trading

    Agricultural Stocks May Head Even Lower (POT, MON)

    Agricultural chemical companies may resume major downtrends after working off oversold technical conditions.
RELATED FAQS
  1. What other sectors are most similar to oil & gas drilling?

    Learn about sectors with companies that face similar challenges and rewards as the oil and gas drilling sectors. One example ... Read Answer >>
  2. Who are Monsanto's main competitors?

    Learn about Monsanto Company's two main operating divisions and its main competitors within each sector, including The Mosaic ... Read Answer >>
  3. What developed countries have the greatest exposure to metals and mining?

    Learn about the three developed countries with the largest exposure to the metals and mining sector: Canada, Australia and ... Read Answer >>
  4. How risky is it to invest in metals and mining companies with operations in politically ...

    Learn about a number of risk factors such as tax policies and changes in fees that can affect a mining company operating ... Read Answer >>
  5. Why should a growth investor consider the metals and mining sector?

    Examine facts and trends about the metals and mining sector and the world economy that make metals and mining stocks attractive ... Read Answer >>
  6. Which emerging markets should an investor consider for exposure to the metals and ...

    Discover the world's top emerging market countries for investing in the metals and mining sector and what mined resources ... Read Answer >>
Hot Definitions
  1. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  2. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  3. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  4. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  5. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
  6. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
Trading Center