Mosaic Falls as It Says More Potash Cuts May Come: Chicago Mover
Mosaic Co. (MOS), the largest U.S. fertilizer producer, fell the most in more than a month after saying it may further reduce potash output following delays to customer purchases of the crop nutrient.
Mosaic dropped 3.3 percent to $49.10 at the close in New York.
“We will continue to match production with demand, which may require us to further lower our operating rates,” Chief Financial Officer Larry Stranghoener said today at an investor presentation in New York. The Plymouth, Minnesota-based company yesterday cut its fiscal second-quarter forecast for potash and phosphate shipments, citing delayed purchases by foreign buyers.
Mosaic expects to ship 1.3 million to 1.4 million metric tons of potash in the quarter ending Nov. 30, down from an Oct. 2 forecast of 1.6 million to 1.9 million tons. Delays in signing supply contracts in China and India have spurred other buyers to postpone purchases because they expect prices for crop nutrients to decline, Mosaic said yesterday.
Chief Executive Officer Jim Prokopanko said Oct. 2 that the company slowed potash production in response to weaker demand. Potash, which Mosaic mines in the Canadian province of Saskatchewan, is applied to crops by farmers to strengthen plant roots and improve drought resistance.
“As long as China and India are out of the market there are going to be more shutdowns,” Edlain Rodriguez, a New York- based analyst at Lazard Capital Markets LLC, said today in a telephone interview. “Mosaic and the other big potash producers can’t afford to have the market oversupplied.”
Mosaic yesterday also reduced its projection for phosphate shipments to 2.9 million to 3.1 million tons, from 3 million to 3.4 million previously.
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