Nutrien Gains on Plans to Up Potash Output to Capture Unmet Demand

By Dhirendra Tripathi

Investing.com – Nutrien Ltd. (NYSE: NTR ) stock traded 0.3% higher in premarket Thursday on plans to raise potash output to capture demand currently unserved due to the Russia-Ukraine conflict.

The world's biggest fertilizer producer plans to increase potash output by nearly 1 million ton this year to about 15 million ton in response to the uncertainty of supply from Eastern Europe.

Potash is a key input required for producing nitrogen-containing fertilizers, and Russia and Belarus are the world's second and third largest producers of the commodity after Canada. The potash fertilizer production is concentrated in a few countries. And with supplies from east Europe ruled out due to the sanctions on Russia and Belarus, Nutrien sees scope to capture additional market share.

The majority of the additional volume is expected to be produced in the second half of the year, the company said.

Nutrien’s 2022 potash production is expected to increase by nearly 20% compared to 2020 and account for more than 70% of global production added over this period, according to the Canadian firm.

“We expect a small increase in our 2022 capital expenditures and will be hiring additional employees across our network of low-cost potash mines in Saskatchewan,” it said.

Nutrien said it will update on its outlook and 2022 guidance in the first quarter earnings release in May.

Reports of Canadian Pacific Railway (NYSE: CP ), which moves potash fertilizer into the U.S., sending a lock-out notice to its employees are capping the gains in the stock. 

This happened after the transporter's talks with a union on wages and other issues failed, a move that could disrupt the supply of the commodity.