UPDATE 1-Potash fertilizer producers eye surging demand but keep lid on supplies

(Adds Nutrien comment, updates share activity)

By Rod Nickel

WINNIPEG, Manitoba, Feb 18 (Reuters) - Global sales of potash fertilizer look to hit record highs this year, helped by a spike in crop prices, but cautious North American producers are keeping a lid on supplies.

Canada's Nutrien Ltd NTR.TO and U.S.-based Mosaic Co MOS.N have benefited as crop prices climbed to multi-year highs, helped by strong Chinese demand.

"We believe there is a cyclical recovery in agriculture underway," Nutrien Chief Executive Chuck Magro said on a conference call.

As crop prices rise, farmers have greater incentive to apply fertilizer and maximize yields.

Nutrien predicts the largest U.S. corn plantings in five years, of 91 million to 93 million acres (36.8-37.6 million hectares), along with greater U.S. soybean and Canadian canola plantings.

Global potash demand this year looks to reach a record-high 68 million to 70 million tonnes, Nutrien, the world's largest producer by capacity, said.

Still, Mosaic has no plans to restart its idled Colonsay, Saskatchewan mine, CEO Joc O'Rourke said.

"We would consider bringing it back if the long-term economics and the demand was there to justify it," he told analysts.

Mosaic's Saskatchewan K3 mine is scheduled to more than double output this year after a multi-year expansion project.

Nutrien has said it could restore 6 million tonnes of annual idle capacity if prices warrant the move, but guided to flat potash sales volumes this year.

If global demand nears the top end of Nutrien's forecast, the company expects to raise production and sales above its 12.5 million to 13 million tonne guidance, Ken Seitz, executive vice-president of potash, told Reuters in a statement.

Swiss-based EuroChem is boosting output, but has run into delays, according to BMO.

Rising potash demand comes as BHP Group BHP.AX is expected to make an investment decision soon on completing its Jansen, Saskatchewan mine.

While potash prices are up in the United States and Brazil, state producer Belaruskali recently settled China and India supply contracts at prices that Nutrien called below market value.

Nutrien and Mosaic posted fourth-quarter profit above analysts' estimates on Wednesday. shares dropped 9% on profit-taking, after the shares on Tuesday hit their highest price in nearly two years. Nutrien stock touched their highest level since June 2019, before easing.