26 April 2012 19:49 [Source: ICIS news]
HOUSTON (ICIS)--North American fertilizer dealers who held off stocking products in the first quarter of 2012 for the spring application season have surged into the market in the second quarter to meet farmer demand, Potash Corporation of Saskatchewan's (PotashCorp) chief executive said on Thursday.
"After remaining on the sidelines through the end of 2011 and the beginning of this year, fertilizer dealers are now beginning to secure products to meet strong demand at the farm level," said PotashCorp CEO Bill Doyle.
"While the initial focus for many was on acquiring nitrogen to meet their immediate requirements, purchasing of potash and phosphate products accelerated as we entered the second quarter," Doyle said.
Dealers have now worked through existing potash inventories and are purchasing additional volumes for immediate needs, said Doyle.
Earlier on Thursday, PotashCorp reported that first-quarter net income fell by 33% year on year to $491m, following lower potash sales and production volumes, which resulted in higher costs
Sales during the three months ended 31 March 2012 fell by 21% year on year to $1.75bn (€1.33bn), while the company's gross margin for the quarter fell to $698m from $1.10bn in the same period the year before.
"In North America, we anticipate improved demand through the remainder of 2012, and believe that dealers will try to finish the spring planting season with limited inventory and begin the process of restocking in the third quarter," Doyle said.
PotashCorp said it believes that healthy farm economics and the expansion of crop acreage will continue to support strong fertilizer consumption in Latin America.
PotashCorp estimates that total potash demand in Latin America in 2012 will be 9.8m-10.3m tonnes, similar to the record level of 2011.
Doyle said global potash demand in 2012 will total 53m-56m tonnes, with PotashCorp's share to be in the range of 8.8m-9.2m tonnes.
($1 = €0.76)
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