Reuters – Nutrien may consider further slowing its expansion of potash capacity after falling prices and sales volumes led the world’s biggest fertilizer producer to cut its annual profit guidance.
Potash prices have been volatile since Russia invaded Ukraine in February 2022. Sanctions against big global producers Russia and Belarus initially drove up prices, causing farmers to buy less and bring prices back down.
Nutrien is increasing Canadian potash production by 20 per cent to an annual 18 million tonnes by 2026, a delay of one year from its original plan.
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The expansion may slow further, CEO Ken Seitz said May 11.
“Yes, we would consider slowing down,” he said. “If we see that the market’s not there, then we’ll pace our capital accordingly.”
Nutrien’s expansion plans span four mines in Saskatchewan, adding machines and underground equipment and increasing storage and loading capability.
On May 10, the company cut its forecast for 2023 earnings as lower potash prices and volumes dug into first-quarter profit.
Even so, Seitz said demand for potash is growing in North America and Brazil, with Russia and Belarus exports expected to drop a combined 30 per cent compared to 2021.
U.S. farmers this spring are aggressively applying potash, Nutrien said.
Rival Mosaic Co. idled its Colonsay, Sask., potash mine late last year.
Australian Foreign Minister Penny Wong said in April that the government expected a similar result to a separate dispute on wine tariffs, a message repeated by Farrell.
