Potash Corp profits plunge on drop in exports to China and India
The world's biggest potash supplier has seen third quarter earnings plunge 22% on a sharp decline in exports of the key fertilizer ingredient to China and India.
Shipments by Potash Corp of Saskatchewan (TSX:POT) to the two Asian giants, who are the world's biggest consumers of potash, fell due to failure by marketing agency Canpotex to promptly renew supply contracts. Analysts now expect contracts to be refreshed in late 2012 or early 2013.
According to Reuters other contributing factors include high inventories of potash in China and a decline in both government subsidies and the rupee which rendered the fertilizer ingredient more expensive for rural Indians.
Despite the plunge in earnings Potash Corp CEO expects shipments to China to recover by the end of 2012, and believes 2013 will be a "significant recovery year."
Potash Corp. shares edged lower 0.30% in Thursday trading in Toronto.