Jan 26, 2017 – The deepest slump in a decade for the oversupplied potash fertilizer market may abate only slightly in 2017, major producers say, and could take years to correct due to the imminent startup of new mines.
Canada’s Potash Corp of Saskatchewan Inc , the biggest fertilizer producer, forecast a much less profitable year on Thursday than analysts expected, and reported a surprisingly big drop in quarterly profit.
Potash prices are hovering around their lowest levels since 2007, amid bloated capacity and weakening farm incomes. Adding to miners’ problems, new low-cost mines are scheduled to begin production.
Oversupplied conditions may improve between 2020 and 2022, said Agrium Chief Executive Chuck Magro at a British Columbia investor conference on Wednesday. Agrium Inc and Potash plan to merge by mid-2017 to cut costs.
“The markets are very, very competitive right now and (the merger) is the only way that we can compete,” Magro said. Germany’s K+S AG will ramp up production at its Western Canada mine this year, while EuroChem begins mining potash in Russia next year.
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