Potash Corp. of Saskatchewan shares fell sharply Wednesday after the company said it would reduce output to cope with low demand for fertilizer from the world's farmers.
The stock fell more than 10 per cent, closing at $108.34 on the Toronto Stock Exchange.
"Lagging demand due to an extremely slow U.S. spring season and extended negotiations with offshore buyers are the reasons behind the shutdowns," the company said in a statement.
The company said it would cut production by 800,000 tonnes, bringing its total curtailments to 5.5-million tonnes since August. Goldman Sachs - which has a "hold" rating on the company's shares - said global potash inventories are 99 per cent higher than the five-year average.
Seventeen analysts follow Potash Corp., according to Bloomberg, with 14 "buy" ratings and three "holds." Their average price target is $144.75. The shares have gained almost 35 per cent this year.
Other potash producers took a hit from the company's announcement, with competitors Agrium Inc. down more than 7 per cent, and Mosaic trading nearly 10 per cent lower. Meanwhile, Europe's largest producer, K+S AG, said it would see a "significant" decline in profit because of decreased demand for fertilizer.Report Typo/Error