Canada’s Nutrien Ltd. NTR-N, the world’s biggest fertilizer company, is bumping up potash production as sanctions restrict its rival in Belarus, but is holding off on bigger expansion, its interim chief executive said on Thursday.
Potash prices have climbed to decade highs as state-owned Belaruskali, the second-largest producer after Nutrien, copes with U.S. and European sanctions that have forced Belarus to divert shipments away from a key Lithuanian port. Climbing prices have increased farmers’ costs and contributed to food inflation.
Nutrien expects to sell 13.7 million to 14.3 million tonnes of potash this year, up from its record 13.6 million last year. It has capacity to add a further 500,000 tonnes in the second half if necessary, interim CEO Ken Seitz said.
But Mr. Seitz told analysts on a conference call that Nutrien would need to see “prolonged challenges” facing Belarus for the company to expand production further, which would require hiring and capital spending at mines.
“We want to take a very pragmatic approach,” Mr. Seitz said. “… We’re trying to avoid building churches for Easter Sunday.”
In an interview, Mr. Seitz said he will gauge how long Belarus may face sanctions based on how President Alexander Lukashenko deals with the West as economic pressure builds on the country.
Nutrien shares climbed almost 4 per cent in Toronto after it forecast higher 2022 profit than expected on Wednesday.
A potential Russian invasion of Ukraine could lead to sanctions on Russia, and have further implications on food and fertilizer prices, Mr. Seitz said.
U.S. President Joe Biden said on Thursday the threat of a Russian invasion is “very high.”
Russia is a major potash producer and exporter of natural gas, a key input in producing nitrogen fertilizer.
Mr. Seitz said Nutrien’s potash customers in Southeast Asia and nitrogen buyers in North America are looking to secure supplies further into the future than usual as a result of uncertainty about Russia.
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