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Fertilizer producer Nutrien may further slow potash expansion as sales slump

FILE PHOTO: An interior view of the storage warehouse is seen at Nutrien's Cory potash mine near Saskatoon

By Rod Nickel

WINNIPEG, Manitoba (Reuters) -Canada’s Nutrien Ltd may consider further slowing its expansion of potash capacity, its CEO said on Thursday, after falling prices and sales volumes led the world’s biggest fertilizer producer to cut its annual profit guidance.

Potash prices have been volatile since Russia invaded Ukraine in February, 2022, as sanctions against big global producers Russia and Belarus initially drove up prices, causing farmers to buy less and bring prices back down.

Nutrien is increasing Canadian potash production by 20% to an annual 18 million tonnes by 2026, a delay of one year from its original plan.

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The expansion may slow further, CEO Ken Seitz said on a conference call.

“Yes we would consider slowing down,” Seitz said. "If we see that the market's not there, then we'll pace our capital accordingly."

Nutrien's expansion spans four mines in the province of Saskatchewan, adding machines and underground equipment and increasing storage and loading capability.

Nutrien’s shares dropped 4% in Toronto. On Wednesday, the company cut its forecast for 2023 earnings as lower potash prices and volumes cut first-quarter profit more than expected.

Even so, Seitz said demand for the company's potash is growing in North America and Brazil, with Russia and Belarus expected to export 30% less combined this year than they did in 2021, before Russia's invasion of Ukraine.

U.S. farmers this spring are aggressively applying potash, Nutrien said.

Rival Mosaic Co idled its Colonsay, Saskatchewan potash mine late last year.

(Reporting by Rod Nickel in Winnipeg, Manitoba)