PotashCorp, the world s top fertilizer maker, said Oct. 27 its quarterly profit more than doubled, as strong grain prices boosted demand for its crop nutrient products.
Despite wides pread economic concerns during the quarter, the push to capitalize on strong crop prices continued to support demand for fertilizer around the globe, the company said.
PotashCorp said offshore demand for its namesake nutrient remained robust in the quarter, while potash prices also rose, reflecting tight market conditions.
The Saskatoon, Saskatchewanbased company said net income was $826 million, or 94 cents a share, up from $343 million, or 38 cents a share, a year earlier.
Revenue rose 47 per cent to $2.32 billion, on the back of strong demand and higher prices across its potash, phosphate and nitrogen businesses, the company said.
North American potash markets look extraordinarily strong for 2012, chief executive Bill Doyle said in a conference call.
The big issue for everyone to understand is we re going to have an extraordinarily tight market because of the constraint on the production side.
PotashCorp said that although fertilizer dealers around the world were acting prudently to minimize their risks and inventories, robust demand continued to pressure global potash supplies.
We believe most producers have been operating at or near their full capabilities in an attempt to keep pace, the company said.
PotashCorp also tried to allay investor concerns about the pullback and heightened volatility in grain prices, arguing that low global grain inventories will continue to support high crop prices in the near term.
The Chicago futures price for corn, a fertilizer-intensive crop, has retreated from its June peak, but remains about 12 per cent higher than a year ago, giving farmers more incentive to apply crop nutrients.
Six-dollar corn is nirvana for me, Doyle said, when asked if farmers might balk at high fertilizer prices with corn easing off highs. (Farmers) just lick their chops at $6 corn. I don t see any farmer backing off from fertilizer.
Six-dollar corn is nirvana for me. (Farmers) just lick their chops at $6 corn. I don t see any farmer backing off from fertilizer.