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To: LoneClone who wrote (44627)	10/6/2009 10:36:12 PM
From: LoneClone	Read Replies (1) \| Respond to of 196417

Mosaic Expects Potash Demand to Return in 2010 After Sales Drop bloomberg.com By Christopher Donville Oct. 5 (Bloomberg) -- Mosaic Co. expects potash demand to return to “normal” by the second half of its fiscal 2010 after plunging sales of the fertilizer contributed to a 92 percent decline in profit in the company’s first quarter. Mosaic climbed 25 cents to $46.21 at 6:22 p.m. in electronic trading after the close of the New York Stock Exchange. Shares of the Plymouth, Minnesota-based fertilizer maker rose 33 percent this year through the close of regular trading today. Mosaic expects “a strong recovery in potash shipments sometime before the end of our fiscal year” in May, Chief Financial Officer Lawrence Stranghoener said in a telephone interview after the company announced its quarterly earnings. He defined “normal” potash shipments as an annual pace of 8 million to 8.5 million metric tons. Mosaic reported potash sales volumes of 5.05 million tons in its 2009 fiscal year, down from 8.56 million in 2008. Farmers worldwide “reduced crop nutrient applications in their most recent growing season, drawing down the nutrient levels banked in their soils,” Chief Executive Officer Jim Prokopanko said in a statement reporting quarterly earnings. “We believe farmers will increase application rates in response to high 2010 new crop prices and the need to replenish the large amount of nutrients withdrawn by the record crop this year.” Mosaic is among potash producers in North America expanding production capacity, even amid output cutbacks, in anticipation of renewed demand for the crop nutrient. Capital Spending Capital spending by Mosaic will be $1 billion to $1.2 billion, unchanged from the company’s previous spending forecast for the fiscal year in July, according to the statement. Mosaic’s net income tumbled to $100.6 million, or 23 cents a share, in the three months ended Aug. 31, from $1.18 billion, or $2.65, a year earlier, the company said today in a statement. Analysts expected profit of 34 cents, the average of 12 estimates in a Bloomberg survey. Prokopanko has cut output of potash, a form of potassium, to bolster prices and pare inventories. Prices for phosphate- based nutrients including diammonium phosphate have stabilized after plunging as wheat, corn and soybean futures dropped from record highs last year. “Potash demand and pricing are the big question marks right now,” Ben Johnson, an analyst at Morningstar Inc., said in an interview before the earnings were announced. “Farmers are still sitting on their wallets. The price risk is to the downside.” Sales Decline First-quarter net sales fell 66 percent to $1.46 billion, the company said. North America’s largest fertilizer producer, Potash Corp. of Saskatchewan Inc., cut its full-year profit forecast on Sept. 21 amid lower-than-expected demand for its namesake crop nutrient. China, among the world’s largest importers of potash, has not concluded annual contract talks with international suppliers on prices and volumes for this year, forcing Mosaic and other producers to reduce output. Mosaic’s average potash price fell 22 percent to $382 a metric ton, from $488 in the same quarter last year. The company, the world’s largest producer of manufactured phosphate nutrients, sold diammonium phosphate for an average of $276 per metric ton in the quarter, down 73 percent from $1,013 a year earlier. Mosaic, which is 64 percent owned by privately held Cargill Inc., said it expects to sell 1.8 million to 2.2 million tons of phosphate products in the second quarter. (Mosaic scheduled a conference call for tomorrow at 9 a.m. New York time at +1-888-679-8034. The passcode is 41404673.) To contact the reporter on this story: Christopher Donville in Vancouver cjdonville@bloomberg.net. Last Updated: October 5, 2009 19:04 EDT