UPDATE 3-Potash Corp profit misses, outlook weakens as prices slide
By Rod Nickel
July 25 (Reuters) - Potash Corp of Saskatchewan Inc , the world's biggest fertilizer producer, reported a lower-than-expected quarterly profit on Thursday and cut its outlook as prices of its crop nutrients fell.
The Canadian miner's U.S.-listed shares dropped as much as 5.2 percent to their lowest in nearly three years earlier in the day. But by the afternoon, the stock had pared its losses in New York to a drop of 1.8 percent to $37.24 and down 2.2 percent to C$38.30 in Toronto.
Producers of crop nutrients potash and phosphate have struggled to stop a slide in prices amid ample supplies and soft demand in key importer India because of reduced government subsidies and a weakening rupee.
Unfavorable subsidy conditions, which favor nitrogen over potash and phosphate, might not improve for up to a year until after India's spring election, said Chief Executive Officer Bill Doyle, echoing earlier comments by rival Mosaic Co.
But "it depends on how urgent it gets," Doyle said in an interview with Reuters. "If the crop comes off very poorly, they may have an emergency situation they have to address before the election."
Poor crops this year would likely pressure the Indian government to boost fertilizer subsidies to help farmers maximize output in the following cycle and avoid a food shortage.
Doyle added that, while India's soft demand is a "drag" on Potash Corp, it is a bigger problem for nearby fertilizer producers such as ICL Israel Chemicals Ltd and Arab Potash Co Plc. Continued...