06 August 2010 18:45 [Source: ICIS news]
“The outlook for nitrogen and other fertilizers is favourable, weather permitting, due to an early harvest, anticipation for a large corn planting in 2011 and higher application rates,” said CF chairman and chief executive Stephen Wilson in a conference call with investors.
In addition to a strong North American outlook, Wilson said near-term demand from Latin America, India and other markets in Asia should continue to provide support to the market.
CF on Thursday reported that second-quarter net income fell 50% to $105m (€80m) compared with $213m in the year-earlier period. The drag on income was attributed in part to costs associated with its acquisition of Terra Industries, the company said on Thursday.
Second-quarter results included $113.7m of business combination and integration costs resulting from the Terra takeover earlier this year.
CF reported net sales in the second quarter of $1.3bn, up 32% from $991m in the same period last year, due to the inclusion of $526m in Terra net sales, higher average phosphate selling prices, and higher nitrogen volumes.
Looking ahead, Wilson said that global grain prices resulting from drought in Russia and other former Soviet Union countries would continue to be high and promote a strong demand environment for fertilizers this autumn and next spring in North America.
“Farmers will be in good financial shape in 2011 and we expect corn acres to be 90m acres or more in the US next year, which would mean a potential for about a 2% increase in total nitrogen use,” Wilson said.
CF said conditions in the phosphate market also are favourable for the second half of 2010 in both North America and Europe.
India continued to require large phosphate volumes, and restocking demand was emerging in South America, CF said.
($1 = €0.76)
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