UPDATE 2-Mosaic 4th-qtr profit slips on weaker fertilizer prices

Tue Jul 16, 2013 12:26pm EDT
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By Rod Nickel

July 16 (Reuters) - Falling prices of phosphate and potash dragged down quarterly profits for Mosaic Co, and the U.S. fertilizer producer said it expects a further drop amid soft demand from Indian buyers and a lapsed contract with China.

Depreciation of the Indian currency as well as reduced subsidies by the government there have made imported phosphate and potash fertilizer more expensive for manufacturers and farmers in the biggest phosphate importing country, which relies completely on foreign potash supplies.

The unfavorable 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, who sees them likely contributing 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.

Prokopanko also said he expects overall demand to be strong for the rest of this year, especially in North America and Brazil.   Continued...