26 January 2012 20:13 [Source: ICIS news]
HOUSTON (ICIS)--Global fertilizer sales will expand in the first quarter of 2012 and through the remainder of the year as farmers seek to capitalize on high crop prices, said Canada-based fertilizer maker Potash Corporation of Saskatchewan (PotashCorp) on Thursday.
"Agriculture fundamentals are exceptional for famers, and we think the fertilizer market will turn on a dime and result in a really good year," said PotashCorp chief executive Bill Doyle in a conference call with investors.
During the fourth quarter, demand for potassium, phosphate and nitrogen fertilizers decreased as many farmers in North America decided to delay forward purchasing for spring applications while waiting for more favourable pricing.
"Although the lull in purchasing for the new year has resulted in lower estimates of annual global potash shipments, we still see potential for a record year in 2012, with shipments estimated to be in the range of 55m-58m tonnes," Doyle said.
"In North America, the current cautious approach of dealers managing their potash inventories is expected to keep shipments for the first quarter below those of the opening quarter of 2011. Given supportive crop economics and the prospect of record corn and soybean plantings, we anticipate demand will strengthen as the year progresses, with total shipments in the range of 9.5m-10m tonnes for 2012," said Doyle.
PotashCorp expects Latin America to remain a region of strength, following a year of record fertilizer imports by Brazil that included an estimated 7.5m tonnes of potash.
The company anticipates buyers in this region will engage more aggressively by late in the first quarter, with rising farmer demand fuelled by increasing acreage and strong crop economics for soybeans, corn and sugar cane.
PotashCorp estimates potash shipments to Latin America will be 10m-10.5 million tonnes in 2012, potentially surpassing 2011 record levels.
PotashCorp said China’s 2012 potash consumption will be in the range of 10.5m-11m tonnes, including imports of approximately 6.5m tonnes.
In India, uncertainty over government subsidy levels, a weakened rupee, higher retail potash prices and congestion at port facilities could limit near-term growth.
Doyle said PotashCorp anticipates total potash shipments to India in 2012 will be in the range of 4m-5m tonnes, flat from 2011.
Earlier Thursday, PotashCorp reported that fourth-quarter 2011 net income grew by 34% year on year to $683m (€519m), despite a slowdown in global fertilizer demand.
Sales increased by 2.9% year on year to $1.87bn, while the company’s gross margin for the quarter grew by 7.7% to $890m.
In late-day trading at the New York Stock Exchange, shares of PotashCorp were trading at $45.78/share, up 55 cents from the prior day's close.
($1 = €0.76)
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