Demand for potash will likely grow by more than 36%, or 15-million tons yearly, over the next decade, Potash Corp COO David Delaney said on Wednesday.And while cautious buying since November last year caused producers including the world’s biggest to idle some mines, demand will return in the coming weeks, he said.“We see this really getting going in the next thirty days,” Delaney commented in a presentation at the Bank of America Merrill Lynch Global Agriculture conference.
Last year, producers shipped around 55-million tons of the crop nutrient, and the figure for this year would likely grow to between 55-million and 58-million tons, he said in remarks broadcast over the Internet.Companies including TSX- and NYSE-listed Potash Corp have cut output of potassium chloride in response to softening demand in the wake of the European debt crisis. Last week, the firm said it would prolong shutdowns at two of its biggest operations in Saskatchewan by up to an extra month.
Potash Corp, which together with Mosaic and Agrium forms the Canpotex Canadian marketing cartel, has said it has trimmed output to match supply with demand.Questioned on whether the firm was doing so to support prices, Delaney said: “We love price, believe me. Price is key to what we do.“At the end of the day, you can give up price but it’s not always easy to get it back.”Prices held their ground around $500/t at the Port of Vancouver in February, according to Scotiabank.Delaney’s bullish comments on demand for the remainder of the year mirror earlier statements Potash Corp CEO Bill Doyle made.BMO Financial Group strategy adviser Don Coxe last week said in an interview that there would soon be “terrific” potash sales, as farmers in the US were likely to get an early start this year, allowing them to take advantage of high grain prices.Potash Corp is negotiating a new supply contract with Chinese buyers, and expects to reach an agreement in March, commented Delaney.