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Potash fertilizer producers eye surging demand but keep lid on supplies

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Rod Nickel
·2 min read
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By Rod Nickel

WINNIPEG, Manitoba, Feb 18 (Reuters) - Global sales ofpotash fertilizer look to hit record highs this year, helped bya spike in crop prices, but North American producers are keepinga lid on supplies.

Canada's Nutrien Ltd and U.S.-based Mosaic Cohave benefited as corn, soybean and canola pricesclimbed to multi-year highs, helped by strong Chinese demand.

"We believe there is a cyclical recovery in agricultureunderway," Nutrien Chief Executive Officer Chuck Magro said on aconference call.

As crop prices rise, farmers have greater incentive to applyfertilizer and maximize yields.

Nutrien predicts the largest U.S. corn plantings in fiveyears, of 91 million to 93 million acres (36.8-37.6 millionhectares), along with greater U.S. soybean and Canadian canolaplantings.

Global potash demand this year looks to reach a record-high68 million to 70 million tonnes, Nutrien, the world's largestproducer by capacity, said.

Mosaic has no plans to restart its idled Colonsay,Saskatchewan mine, Chief Executive Joc O'Rourke said.

"We would consider bringing it back if the long-termeconomics and the demand was there to justify it," he toldanalysts.

Mosaic's Saskatchewan K3 mine is scheduled to more thandouble output this year after a multi-year expansion project.

Nutrien has said it could restore 6 million tonnes of annualidle capacity if prices warrant the move, but guided to flatpotash sales volumes this year.

Swiss-based EuroChem is boosting output, but has run intodelays, according to BMO.

Rising potash demand comes as BHP Group is expectedto make an investment decision soon on completing its Jansen,Saskatchewan mine.

While potash prices are up in the United States and Brazil,state producer Belaruskali recently settled China and Indiasupply contracts at prices that Nutrien called below marketvalue.

Nutrien and Mosaic posted fourth-quarter profit aboveanalysts' estimates on Wednesday.

Mosaic shares dropped 10% on profit-taking, after the shareson Tuesday hit their highest price in nearly two years. Nutrienstock touched their highest level since June 2019, beforeeasing.

(Reporting by Rod Nickel in WinnipegEditing by Marguerita Choy)