Fertilizer stocks dive on Potash, K+S output cuts

* Shares of Potash Corp, Agrium, K+S and others tumble

* Potash Corp to cut production by 800,000 tonnes

TORONTO, June 17 (Reuters) - Shares of fertilizer makers across the globe fell sharply on Wednesday after Canada's Potash Corp of Saskatchewan (POT.TO) (POT.N) and Germany's K+S (SDFG.DE) announced further potash production cuts as farmers continued to hold-off application of the key crop nutrient.

Potash Corp's shares fell more than 9 percent to $97.32 on the New York Stock Exchange, while shares of rivals Agrium Inc (AGU.N), Mosaic Co (MOS.N) and Intrepid Potash (IPI.N) fell 7.6 percent, 9.5 percent and 11.4 percent, respectively.

Late on Tuesday, Potash Corp said it would cut 2009 potash production by an additional 800,000 tonnes, bringing cuts this calendar year to 4.7 million tonnes and total curtailments to 5.5 million tonnes since August 2008.

Fertilizer company shares peaked in mid 2008, as grain prices were at record levels and inventories remained tight. But stocks in the sector collapsed in the second half of 2008 as fertilizer demand evaporated in the face of the global economic slowdown.

Shares of K+S fell more than 16 percent, while those of Russian rival Uralkali (URKA.MM) fell more than 10 percent after K+S said it plans to reduce potash production and cut prices. [nLH599947]

The announcements also had a roll-over effect on shares of nitrogen- and phosphate-based fertilizer producers such as Yara International (YAR.OL), Terra Industries (TRA.N) and CF Industries (CF.N), whose shares fell 9.4 percent, 4.2 percent and 5.7 percent, respectively.

The world's major potash producers have cut about 40 percent of global production capacity in the past six months in a bid to cope with the collapse in demand.

However, despite tight supply-side management, North American potash inventories have risen steadily in recent months to about 3.9 million tonnes, which is 99 percent higher than the five-year average.

(Reporting by Euan Rocha; editing by Peter Galloway)

((euan.rocha@thomsonreuters.com; +1 416 941 8185; Reuters Messaging: euan.rocha.reuters.com@reuters.net)) Keywords: FERTILIZER/

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