11 June 2013 00:21 [Source: ICIS news]
HOUSTON (ICIS)--Despite weather delays in the 2013 planting season, PotashCorp remains optimistic about the outlook for potash applications and pricing for the crop nutrient, an executive with the Canada-based company said on Monday.
Speaking during a conference call, chief financial officer Wayne Brownlee said that it does not appear that the slow pace of planting has caused any deferrals in terms of potash demand. As of Monday, 95% of US corn plantings had been completed, just slightly behind the five-year average of 98%.
“Basically, we had good dealer volumes in the first quarter of the year. People were making sure they had in place some inventory levels. Even though it is a bit of a shortened season, movement from dealers to the farm level has been good,” Brownlee said.
“Application rates from everything that we have been able tell have been good, and while it was a little bit later start, we have been finding there are continuing potash movement on to the fields," he added.
Brownlee said that even if this year’s corn crop is a huge harvest and forces potash to come down to a more modest price level, the company believes both producers and farmers will be in an advantageous position.
“We didn’t see potash prices ramp up when corn hit $7. I think corn at $4 or $5/bushel is a healthy level, the farmers will make a good income and a return on the inputs will be good, so we are not too worried about that,” he said.
“There still remains every incentive for farmers to maximize yield and maximize acreage," he added. "We continue to get a very optimistic and excited response from our dealers and from the farm level in the United States.”
Additionally, Brownlee said the further outlook for potash remains healthy as the company sees more demand from China coming in the second half of 2013.
“We remain optimistic that there will be a second half Chinese contract with Canpotex. We started the year thinking that market was going to be a 10.5 to 11 million ton market, and that remains our thought process. Port inventory levels at this stage are normalised, there is nothing there to be concerned about one way or another, so it is pretty clear that China is going to need more tons in the second half,” Brownlee said.
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