It is being called the Saudi Arabia of fertiliser, farmers are yelling about cartels and a massive land grab is under way to exploit the riches of the world's latest commodity shortage. The mineral in high demand is potash, the main source of potassium, an essential ingredient in fertiliser, and the global spotlight has settled on Saskatchewan.

A third of the world's potash is found in the Canadian province, where temperatures can plunge to an un-Arabian -40C in winter and where the mineral is extracted by mining it from salt deposits in ancient seabeds.

Last week, Rio Tinto, the mining giant, declared that it wanted 10 per cent of the world market in potash. Rio is looking elsewhere, at developing Potasio Rio Colorado, a large potash deposit in Argentina, the only significant resource in Latin America. It is targeting the plantations of Brazil. This comes two months after BHP Billiton, Rio's great rival, launched a C$284 million (£141 million) bid for Anglo Potash to gain full ownership of a Canadian potash joint venture.

The miners' enthusiasm comes from soaring potash prices in a world hungry for food and desperate for the means to grow more food as quickly as possible. The price of potash has jumped fivefold in three years - and farmers are getting anxious. Indeed, in the emerging markets of Asia, where landholdings are small and agriculture is dominated by peasant producers, the cost of fertiliser is becoming a political issue. In India, where the Government subsidises fertiliser, the budget of 310 billion rupees (£4billion) is expected to triple to 950 billion rupees.

Potash Corporation, the Canadian company that dominates the global market, signalled recently that it had shipped cargoes to Asian markets at spot prices of $1,000 per tonne. Last week Potash Corp revealed quarterly earnings of $900 million (£451 million), up 60 per cent on last year

At a recent fertiliser conference in Vienna, U.S. Awarthi, managing director of the Indian Fertiliser Co-operative, one of the world's leading buyers, accused producers of combining against consumers to create cartels of suppliers. “There is a control of phosphate suppliers and control of potash which are creating havoc with agriculture,” he said. “We are appealing to the United Nations to put some fear of God in these cartels.”

The world consumes about 60million tonnes of potash and since the late 1970s demand for potash has been fairly stable. According to Barry Bain, a director of Fertecon, the fertiliser consultancy, a small group of suppliers in Canada, Russia and Germany has been able to manage supply. “It's an oligopoly,” he said. “Three marketing organisations represent about 70 per cent of sales of potash.”

These comprise Canpotex, the marketing organisation for the Canadian triumvirate of Potash Corporation, Mosaic and Agrium; BPC, representing the Belarussian and Russian producers Uralkali and Belaruskali; and K+S Kali, the German producer.

Rio considers that the present spot price is not sustainable and will subside, but it is expecting prices to remain high, above $700 per tonne. The additional production it is building in Argentina will be mopped up quickly. “We are optimistic that demand will take up the new supply,” Kevin Fox, Rio's general manager in Argentina, said.

“This is a supply-and-demand story,” Mr Bain said. “When crop prices are high and a farmer can see he will lose yield if he doesn't add fertiliser, he is prepared to absorb the extra cost. There is a net gain in yield from adding potash to crops.”

Grain prices, which had been soaring, have subsided, but they remain high and demand for more food in the world is still strong. That suggests that the potash sheikhs of Saskatchewan, deep in the sometimes frozen hinterlands of Canada, will continue to reap a good harvest.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax