By Allison Martell
Toronto, Oct 8 (Reuters) - The Russian potash "soap opera"could weigh on prices until demand rises substantially orproducers shut some capacity, the chief executive of Canadianfertilizer company Agrium Inc said on Tuesday.
Prices for the crop nutrient have slipped since mid-summer,when Russian's Uralkali OAO quit its exportpartnership with Belaruskali, owned by the Belarus government,saying it would seek to boost volume.
The business dispute quickly turned into a diplomatic rowafter the CEO of Uralkali was detained in August while visitingBelarus, which depends on income from Belaruskali.
"The soap opera in Russia, and I think that's the best wayto characterize it ... I don't know how it's going to play out,"said Agrium CEO Mike Wilson at the company's investor day in NewYork.
Wilson said the structure of the market has to go back towhere it was, and some producers need to shut capacity, ordemand has to soar above 60 million tonnes. Otherwise, he said,prices will be under pressure.
In June, the International Fertilizer Industry Associationforecast 2013 potash demand of about 33 million tonnes.
"I am a little more cautious than some of our competitors,"said Wilson, but added that he was optimistic over the longterm. "There's huge barriers to entry."
Agrium is aiming to complete an expansion at its Vanscoy,Saskatchewan, potash mine by the end of 2014. The company hassaid repeatedly the project still makes sense at current prices.
ALASKA PLANT COULD RESTART
Agrium is in the early stages of evaluating whether torestart an idled nitrogen plant in Kenai, Alaska, said ChiefOperating Officer Chuck Magro, who is tapped to become CEO whenWilson retires at the end of this year.
The Kenai facility was idled in 2008 because of a shortageof natural gas.
"I just want to make this really clear. Today, there's notenough natural gas to restart Kenai," said Magro. "But there isa lot of gas drilling in the Cook Inlet again, and we areworking with the gas companies to determine if there is apossibility to restart those assets."
Magro said that determination should take about a year.
Shares fell 3.3 percent to C$87.50 on the Toronto StockExchange and 3.2 percent to $84.95 on the New York StockExchange.
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