TORONTO (miningweekly.com) – Shares in Canada's Potash Corporation of Saskatchewan rose on Friday, after the company raised its first quarter profit guidance, citing a sharply higher demand for potash and improved margins for its nitrogen and phosphate products.

Potash Corp shares were up 6,82%, at $127,89 apiece by 14:46 in Toronto. The stock traded as high as C$129,15 a share earlier in the day.

Other fertiliser companies also gained ground: Agrium, which said on Thursday it would abandon a more than year-long hostile bid for US rival CF Industries, rose 7,58%, while NYSE-listed Mosaic was up 7,1% on Friday afternoon.

Potash Corp said it now expects first-quarter earnings to be between $1,30 and $1,50 a share, well above its January 28 forecast of $0,70 to $1,00 a share.

“The upward revision reflects a sharp rebound in potash demand that is expected to drive a record quarter for North American sales volumes and strong offshore shipments, as well as higher-than-expected margins in nitrogen and phosphate,” the company said.

Prices and demand for potash, which is one of three essential crop nutrients, soared in 2007 and the first three quarters of 2008, with some shipments selling for as high as $1 000/t on the spot market.

However, farmers around the world responded to the financial crisis by deferring the use of fertiliser and Potash Corp and the other handful of global producers were hit hard, with Potash Corp reporting an almost 70% year-on-year decline in fourth-quarter 2009 earnings.

“Strong farmer returns, a depleted distributor pipeline and the agronomic need to replace soil nutrients have kick-started a potash rebound from 2009 lows,” Potash Corp CEO Bill Doyle said in a statement.

“While we know that growth does not follow a straight upward line, we believe the increase in potash sales volumes this quarter represents the beginning of a return to long-term growth in demand.”

Canpotex, the offshore marketing company for Canadian potash producers Potash Corp, Agrium and Mosaic, said in February it had agreed to sell about 600 000 t of potash in the second quarter to Indian buyers, at a contract price of $370/t, including freight costs.

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