By Rod Nickel
WINNIPEG, Manitoba (Reuters) -Nutrien Ltd, the world’s biggest fertilizer producer, intends to follow through with plans to expand production capacity of potash and nitrogen, despite a sharp pullback in potash demand due to high prices, its chief executive said on Thursday.
Nutrien (NYSE:) is increasing its Canadian potash production by 20% to an annual 18 million tonnes by 2025, helping to address tight global supplies related to sanctions against Russia and Belarus, the second- and third-largest producers after Canada.
Prices rose so high, however, that Nutrien’s sales in North America and Brazil, its top two potash markets, disappointed investors during the third quarter.
“We view this as a temporary lull and our confidence in the outlook for the fundamentals of our business has not changed,” CEO Ken Seitz said on a conference call.
Nutrien on Wednesday cut its full-year adjusted earnings forecast for the second time this year.
Nutrien shares plunged 12.3% in Toronto.
Farmers in the U.S. and Brazil have reduced potash purchases amid high prices and ample supplies, Seitz said.
He said U.S. Midwest farmers, who apply fertilizer in fall after harvesting, as well as spring, are showing more interest now at the reduced potash prices.
Prices have tumbled during the past six months, though not enough to stimulate further demand, Scotiabank analyst Ben Isaacson said in a note.
