Mosaic Co. (MOS:US), the largest U.S.-based potash producer, expects record global shipments of the crop nutrient this year as customers become more confident that prices are unlikely to extend declines.
“Customers believe a bottom in potash prices has been reached and are now exhibiting improved confidence in their buying decisions,” Mosaic Chief Executive Officer Jim Prokopanko said today in the Plymouth, Minnesota-based company’s fourth-quarter earnings statement.
Potash prices fell after OAO Uralkali, the world’s largest producer, quit a sales accord in July with its Belarusian competitor and announced plans to boost output. Fertilizer buyers were delaying purchases because of concern that prices would continue to decline, Prokopanko said in September.
Improved potash demand is helping to increase the likelihood of a simultaneous rally in both potash and phosphate crop nutrients this year, Prokopanko said today in a telephone interview. Mosaic is the world’s largest producer of phosphate crop nutrients.
“We don’t want to sound too bullish here, though overall it’s looking much more promising,” he said. “It’s better on phosphates and we think we’re coming out of the darkness on potash.”
Potash is used by farmers to help strengthen crop root systems and to resist drought conditions.
At the same time, severe winter weather in parts of Canada and the U.S. is raising concern that a rebound in fertilizer demand may leave some farmers short of potash for planting season, Prokopanko said today on a conference call. Extremely cold temperatures have slowed potash rail shipments in Canada.
Mosaic’s average potash selling price fell 30 percent to $303 a metric ton in the fourth quarter from a year earlier, according to the statement. The company shipped 1.9 million tons of the nutrient, 36 percent more than in the same period in 2012. Mosaic also produced 1.7 million tons of potash in the quarter, 5.6 percent less than a year earlier.
Mosaic’s fourth-quarter net income plunged to $128.9 million, or 30 cents a share, from $615.7 million, or $1.44, a year earlier, the company said in the statement.
Temasek Holdings Private Ltd., Mosaic’s largest shareholder, increased its stake in the company to 23 million shares, or 7.2 percent, according to a regulatory filing. As of Sept. 30, the investment arm of the government of Singapore held about 19 million Mosaic shares, or 6.5 percent, according to data (MOS:US) compiled by Bloomberg.
Mosaic rose 2.4 percent to $47.96 a share at the close in New York.
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