04 May 2012 17:16 [Source: ICIS news]
HOUSTON (ICIS)--Global population growth, rising income levels leading to a shift towards higher protein diets, and continued use of grains as a source of fuel are all contributing to the need to use more fertilizer, US fertilizer maker CF Industries said on Friday.
"In addition to the multitude of factors that support growth and cash generation potential, the increased production of North American shale gas and the associated decline in natural gas prices have created a sustainable cost advantage for the company’s production of nitrogen products," said CF chief executive Stephen Wilson in a conference call with investors.
CF reported record first-quarter net earnings of $368.4m (€280.0m), a 31% increase from the net earnings of $282.0m reported in the first quarter of 2011.
The increase resulted from record first-quarter net sales of $1.5bn, up 30% from $1.2bn in the first quarter of 2011, because of higher sales volumes and nitrogen product prices.
Looking forward, Wilson said that ammonia demand has been robust and favourable weather is providing good conditions for an expected strong side-dress season on corn.
"Urea markets are likely to remain tight through early summer and low inventory in North America, along with expected buying activity in Latin America, India and southeast Asia, should provide support of the market through the planting season," Wilson said.
High demand and continued delays in international capacity additions are expected to keep world ammonia and urea supply and demand in an approximately balanced condition at least through the first half of 2012, said Wilson.
For phosphates, CF anticipates the export market to continue to offer more attractive selling opportunities than the domestic market because of strong demand in Latin America and India.
“Long term, we believe tight global grain stocks will sustain high farm profits, plantings and fertilizer demand,” said Wilson.
CF said it continues to examine an expected investment of $1bn-1.5bn in production capacity and product mix enhancements within its existing North American nitrogen facilities over the next four years.
($1 = €0.76)
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