(Reuters) — Falling prices of phosphate and potash have dragged down quarterly profits for Mosaic Co.
The fertilizer producer says it expects a further drop amid soft demand from Indian buyers and a lapsed contract with China.
Depreciation of the Indian currency and reduced government subsidies have made imported phosphate and potash fertilizer more expensive for manufacturers and farmers.
India is the world’s biggest phosphate importing country and relies completely on foreign potash supplies.
The unfavourable conditions in India could last up to a year, or until after the next general election, when it may be easier for the government to re-balance fertilizer subsidies, said Mosaic chief executive officer Jim Prokopanko.
Read Also
Manitoba Parkland research station grapples with dry year
Drought conditions in northwestern Manitoba have forced researchers at the Parkland Crop Diversification Foundation to terminate some projects and reseed others.
He said the Indian government is likely to contribute more for potash and phosphate and less for nitrogen, which is produced domestically.
“That’s my understanding of Indian politics,” he said.
“They know they’ve got a deficit that has to be tamed, and they’ve chosen, if ham-handedly, to reduce payments for potash and phosphate imports.”
Mosaic estimated current quarter potash prices at $330 to $360 per tonne, compared with an average of $368 last quarter.
It expects realized phosphate prices of $430 to $465 a tonne. In the just-ended quarter, the average price for diammonium phosphate was $483 per tonne.
