PotashCorp Sees 2012 as Record Year Driven by Fertilizer Demand Growth

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Potash shipments were expected to gain in strength through the rest of 2012 after making a comeback in the second quarter of the year, said the Potash Corporation of Saskatchewan (TSX:POT) (PotashCorp) (Saskatoon, Saskatchewan).

The company forecast that 2012 would be a record year for global potash fertilizer consumption, driven by growing consumption in China, Brazil and Southeast Asian countries.

The company said that rising global population and the pressure to produce more food per acre were the overall drivers for the growth in demand for potash crop nutrients. The continuous improvement required in crop productivity, as well as the need for nutrients to achieve higher crop yields to meet tight supplies and rising demand, were expected to support strong global demand for fertilizer during the year. Fertilizer dealers were now securing product to meet strong demand at the farm level, PotashCorp said.

Shipments were expected to reach 53 million to 56 million tons in 2012, with potash consumption recording a yearly growth rate of about 3%, outpacing the other primary nutrients, nitrogen and phosphate, and with China and Brazil taking more than 10 million tons each.

In 2011, the economic crisis and reduced demand from India contributed to difficult market conditions. Added to this was the failure of operating mines globally to match potential demand during the year. This came on the back of geological, logistical and operational issues, which all pointed to a need for new production capacity.

PotashCorp is investing $7.5 billion in an expansion program that will increase production capacity to 17.1 million tons annually. Currently, the company contributes 20% of global potash production capacity.

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