UPDATE 1-Uralkali to cut potash output by half in Dec-March

Tue Dec 4, 2012 5:49am EST
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* Potash producer to cut output by 2 million tonnes Dec-Mar

* Uralkali says India, China halted contract purchases in H2

* Low demand to persist in the Q1, prices seen stable

* Global demand to rise next year to 54 million tonnes

By Natalia Shurmina and Polina Devitt

MOSCOW, Dec 4 (Reuters) - Russia's Uralkali will cut potash output by half to 2 million tonnes in the December to March period to reduce excess global supply during a protracted fall in demand, its chief executive said in an interview.

China and India halted contract purchases of the crop nutrient in the second half of the year and are expected to contract lower volumes next year, making for a slow start to 2013.

China is seen as being well supplied, while a reduction in Indian subsidies and a weaker rupee have made potash more expensive the nation's farmers.

"Starting from December and during the first quarter we will work with 50 percent of capacity, because demand will be rather weak," CEO Vladislav Baumgertner told Reuters. "We also expect that this will help decrease stocks."   Continued...