Global potash demand to rebound on food crisis - PotashCorp

23 July 2009 20:08  [Source: ICIS news]

HOUSTON (ICIS news)--Demand for potash and other fertilizers is expected to jump in 2010 as the global food crisis returns to the headlines, the top executive at Potash Corporation of Saskatchewan (PotashCorp) said on Thursday.

“The global food crisis we heard so much about two years ago has not gone away; it was merely overshadowed by a global financial crisis,” said PotashCorp president and chief executive officer Bill Doyle.

“Pressure on the world food supply is enormous and the headlines of a food crisis will return,” said Doyle in a presentation to investors.

The need for greater food production will result in greater fertilizer use, and higher prices across the agricultural commodity spectrum, Doyle said.

An increase in demand for potash and other fertilizers will be exemplified by what happens in the US and China.

Going into the 2009 growing season, 60% of fields in the US were well supplied with phosphorus and potassium, Doyle said.

A key to the fertilizer market would be the condition of the soil after the 2009 crops are harvested.

“Farmers will test their soils and adjust their needs accordingly,” Doyle said. “They won’t apply one pound less, or one pound more than needed. But they will apply fertilizer.”

Doyle said China, which constitutes 12% of PotashCorp’s market in a normal year, would also return to buying potash on the world stage.

China will have to come back big in 2010 as they have mined the soil for the past two years,” Doyle said.
PotashCorp reported 23 July a 67% year-on-year drop in sales to $856m (€599m) in the second quarter, while operating income fell 78% to $285.5m.

($1 = €0.70)

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By: Frank Zaworski
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