Almost a month after settling a strike that dragged down its potash output, PotashCorp now plans to dial back production.
The Saskatoon-based potash giant said in a statement Tuesday that it plans to reduce its potash output for 2009 by two million tonnes from its operational capacity, starting next month.
The decision, it said, is “consistent with the company’s long-held practice of matching supply to market demand.” Specifically, it said it will produce less potash in the first part of 2009 due to a “short-term deferral of demand” for the fertilizer worldwide.
Farmers, like any other consumer, are feeling the impact of the global financial crisis, the company said.
“We anticipate slow potash demand through the first quarter of 2009,” CEO Bill Doyle said. “Beyond this, we see demand accelerating through the balance of the year as farmers deplete existing stocks and work to rebuild global grain inventories from extremely low levels.”
PotashCorp will be able to ramp up production next year as needed to meet demand, Doyle said, with its expansion projects completed at its Lanigan and Patience Lake mine sites east of Saskatoon.