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PotashCorp Profit Lifted By Surging Grain Prices

PotashCorp, the world’s largest fertilizer maker, reported a higher quarterly profit that topped expectations April 28, as soaring grain prices boosted demand and prices for crop nutrients.

The Saskatoon-based company also raised its full-year earnings forecast, as it expects tight global grain inventories, coupled with strong returns on crops, to spur strong demand for potash, phosphate and nitrogen.

PotashCorp said demand rose to fresh highs with strong demand particularly from Latin America and Asian countries outside of China and India, which typically buy potash via longer-term contracts.

Shares of Potash, which was the target of BHP Billiton’s failed $39-billion hostile takeover in 2010, have risen more than 50 per cent in the last 12 months.

Quarterly revenue rose almost 30 per cent to $2.20 billion.

Salman Partners analyst Jaret Anderson noted that PotashCorp’s quarterly results were solid and its forecasts were as expected.

“This company has massive leverage to potash price changes and fertilizer markets overall,” said Anderson. “Small changes in realized prices and volumes make a very large difference to their earnings.”

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