02 October 2012 17:21 [Source: ICIS news]
HOUSTON (ICIS)--High farm incomes resulting from high crop prices will propel sales of fertilizers in 2013, US producer Mosaic said on Tuesday.
"Crop nutrients have never been more affordable, and farmers around the world continue to have strong incentives to use our products to increase crop yields," said Mosaic chief executive Jim Prokopanko during the company's earnings conference call.
Earlier on Tuesday, Mosaic reported that fiscal 2013 first-quarter (1 June-31 August) net profit fell 18% year on year to $429.4m (€334.9m), primarily driven by lower phosphate volumes and prices.
Mosaic's sales for the three months ended 31 August were $2.51bn, down from $3.08bn in the same period last year.
Mosaic’s potash total sale volumes in the fiscal first quarter were 1.9m tonnes, compared with 1.8m tonnes a year earlier.
Total sales volumes for potash are expected to range from 1.6m-1.9m tonnes for the second quarter, depending upon the level of shipments to India and China, Prokopanko said.
Minnesota-based Mosaic's muriate of potash (MOP) prices are estimated to range from $420-450/tonne FOB (free on board) ex-plant in the second quarter.
Prokopanko said sales volumes for the phosphate segment are expected to range from 3m-3.4m tonnes in the second quarter, with prices for diammonium phosphate (DAP) estimated to range from $520-550/tonne.
First-quarter phosphates segment sales volumes were 2.7m tonnes compared with 3.2m tonnes last year.
Inventories of potash in China provide incentive for China to hold off replenishing its product pipeline for the time being, Prokopanko said, adding that potash shipments to both China and India should resume by the end of the second quarter.
"Meanwhile, sales to southeast Asia and Brazil have made up for any shortfalls in sales to China," Prokopanko said.
Mosaic expects that costs for ammonia, a critical ingredient for phosphate fertilizer production, will be higher in the second fiscal quarter.
While the demand for potassium and phosphorus fertilizers could fall this autumn in some parts of the US midwest, particularly drought-stricken Illinois and Indiana, overall demand for the crop nutrients is expected to be strong as farmers will want to optimise crop nutrition to maximise crop yields, Prokopanko said.
($1 = €0.78)
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