TORONTO, May 20 (Reuters) - Potash Corp of Saskatchewan POT.TO said on Wednesday it intends to curtail 2009 potash production by an additional 400,000 tonnes in a bid to cope with the sharp decline in demand for the crop nutrient.
The Canadian producer said the new round of production cuts will bring the total reductions in production to 3.9 million tonnes year-to-date and 4.8 million tonnes for the 2008-09 fertilizer year, which ends in a few weeks.
The announcement on the additional production cuts was posted on the company’s website.
Global commodity prices have collapsed since peaking in mid-2008, but the price of potash has remained at record highs, as a handful of companies, which control more than 60 percent of the world’s potash production, have maintained a tight rein on supplies.
Despite tight supply-side management, North American potash inventories have risen steadily in recent months to more than 3.5 million tonnes, which is 72 percent higher than the previous five-year average.
However, Potash Corp reiterated that it expects demand to bounce back eventually.
Potash Corp’s shares, which closed at $114.23 on the New York Stock Exchange, fell 1.9 percent to $112.01 in trade after the closing bell. (Reporting by Euan Rocha; editing by Peter Galloway)