SASKATOON — Fertilizer giant Nutrien Ltd. sees promising signs of increased demand for potash in the year ahead.

The Saskatoon-based company says it expects full-year potash shipments of between 68 million to 71 million tonnes, up from the 67 million to 68 million it estimates went out in 2023.

"We are seeing strong potash demand ahead of the spring application season," chief executive Ken Seitz told a conference call Thursday to discuss the company's latest results.

The company expects Southeast Asia to help drive the increase thanks to a combination of lower inventory levels and higher prices for palm oil.

China and Brazil aren't expected to help boost demand because they have elevated inventories, while Europe should see higher sales, as should North America on lower prices, Seitz said.

"Lower input prices have resulted in improved demand in North America."

Prices have plunged from the highs of 2022 that came about in part because of supply disruptions related to Russia's invasion of Ukraine.

Nutrien reported that its price in the fourth quarter of 2023 was US$235 a tonne, down from US$526 a tonne for the same quarter a year earlier.

The lower prices helped lead to fourth-quarter earnings of US$176 million, down from US$1.12 billion in the same period of 2022.

The company sees the potential for prices rising in the year ahead as inventories are at a balanced to tight position.

"We do see potential for firming of potash prices," said Seitz.

Higher production and shipping costs could also drive prices higher. Seitz said challenges of shipping by rail through Russia, and disruptions of the shipping channel through the Red Sea are adding to cost pressures.

To offset lower potash prices, the company is increasing its focus on proprietary products, along with looking at cost savings through measures like increased automation at its mines.

This report by The Canadian Press was first published Feb. 22, 2024.

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