Canada's Agrium sees high crop prices supporting fertilizers

07 November 2012 19:37  [Source: ICIS news]

HOUSTON (ICIS)--High crop prices should attract increased production and drive the demand for crop nutrients, Canadian fertilizer retailer Agrium said on Wednesday.

"Crop nutrient prices are very attractive relative to crop prices and farm budgets, which should be supportive of strong crop input demand in most regions of the world," said Agrium chief executive Mike Wilson in a conference call with investors.

"Strong demand, combined with reduced pipeline inventories, should support producer shipments," Wilson said.

Economic risks, however, may keep buyers and traders mindful of inventory risks, resulting in low buffer stocks and increased price volatility, particularly during periods of strong demand, he said.

Earlier, Agrium reported that third-quarter net earnings fell 56% year on year to $129m (€101m), mainly because of a non-recurring $66m charge for environmental liabilities and a $53m share-based payment expense.

Results were also impacted by downtime at Agrium’s potash operations and a weaker potash market because of uncertainties from ongoing negotiations with India and China, the company said.

Agrium's gross profit for the three months ended 30 September fell by 10% year on year to $798m, on sales of $2.96bn, down 6%.

Wilson said that in South America, Brazilian urea demand in the fourth quarter should be supported by the potential for an increased safrinha corn crop and a higher sugarcane renewal rate than has been the case for the past few years.

Wilson also expects to see strong global phosphate demand through the first half of 2013 with the market in India improving modestly.

($1 = €0.78)

By: Frank Zaworski
+1 713 525 2653

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