TORONTO (miningweekly.com) – Potash dealers are holding back from buying the crop nutrient even more than North America’s second-biggest producer, Mosaic Corp, anticipated they would a month ago, prompting the company to idle up to 20% of its capacity up to May.

However, like its larger competitor Potash Corp, the NYSE-listed company said it is just a temporary situation with 2012 set to be a record year for shipments.

No layoffs would result from the production curtailment, Mosaic added.

“Cautious dealer sentiment continues to delay purchases and lower near-term demand for potash,” CEO Jim Prokopanko said in a statement.

“Farmer economics remain strong, and we continue to expect an above average application season in North America and record-setting global potash shipments in 2012.”

Potash Corp CEO Bill Doyle made similar remarks last week, saying he expected demand to remain weak in the first quarter, before a rapid improvement throughout the remainder of the year.

That company has also curbed potash output, and Russia’s OAO Uralkali, the biggest European producer, said in January it was prepared to cut production in an environment of lower demand.

“While we are confident fundamentals will ultimately prevail, we've taken steps that reflect the near-term supply and demand balance for potash,” Prokopanko said.

On January 4, Mosaic said potash production would remain above 80% of capacity from December to February.

Late last year the company also said it was cutting phosphate production by 250 000 t because of soft demand.

Potash Corp, Mosaic and Agrium Inc make up Canada’s potash cartel called Canpotex, which collectively negotiates prices and volumes with overseas customers.
 

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