Mosaic warns of North American fertilizer demand slump in fourth quarter
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FILE PHOTO: Workers spray fertilizer in a sugar cane field in Zacatepec de Hidalgo, in Morelos state, Mexico, May 31, 2017. Picture taken May 31, 2017. REUTERS/Edgard Garrido/ File Photo
By Sumit Saha
Jan 16 (Reuters) - Mosaic warned on Friday that an unusually steep drop in North American fertilizer demand during the fourth quarter has weighed on its sales and cash flow, sending the company's shares down about 4% in the morning trade.
Demand fell as farmers cut fertilizer use amid tight budgets, while an early onset of winter shortened the application window for the products.
Market conditions were particularly challenging for phosphate fertilizer, which was less affordable during the quarter relative to potash, Mosaic said.
Phosphate shipments in North America were down about 20% from a year earlier, while potash demand was only modestly weaker, it said.
"This is not a good look for Mosaic, but we wonder if the worst is behind the company considering the current phosphate rebound and continued potash stability," said BMO Capital Markets analyst Joel Jackson.
The U.S. fertilizer producer reported phosphate sales of about 1.3 million tonnes for the fourth quarter, below its previous forecast of 1.7 million to 1.9 million tonnes. Potash sales of roughly 2.2 million tonnes were also lower than its prior projection of 2.3 million to 2.6 million tonnes.
In Brazil, Mosaic said tighter credit conditions and increased competition, including imports of lower-analysis phosphate from China, weighed on demand and margins, leaving fourth-quarter volumes at its Mosaic Fertilizantes unit well below plans.
Sales volumes were roughly 9 million tonnes for the full-year 2025, flat year-on-year but reflected a broader downturn, the company said.
Mosaic is set to report its fourth-quarter results on February 24.
(Reporting by Sumit Saha in Bengaluru; Editing by Shilpi Majumdar and Vijay Kishore)
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