Potash producer Mosaic reports better than expected results
Fertilizer producer Mosaic Co. (NYSE:MOS) stocks were up US$2.50 this morning, after the company reported higher-than-expected quarterly profit as better prices helped offset a plunge in phosphate sales and flat potash volumes.
Mosaic CEO Jim Prokopanko warned in a statement that the company expects third quarter results to decline due to near-term macroeconomic uncertainty and cautious distributor purchasing behavior. However, he added that Mosaic remains confident of the strong long-term demand prospects for its products.
In late December, Prokopanko announced that Mosaic, the world's largest phosphate producer, would trim production of phosphate, a key nutrient used for crop production, because prices have fallen to unsustainable levels.
But the company said that it didn’t expect any further production cuts, nor did it plan to join competitors in cutting back on potash output. The company is also battling in the courts for a permit that would let it expand a Florida phosphate mine.
Potash and phosphate, along with nitrogen, are key fertilizers whose demand has intensified considerably in recent years as emerging-market food demand has increased and crop prices have rocketed.