* Says sales, profit decline more severe than thought
* To curtail potash output by 2 mln tonnes in H2
* Shares slump 12.8 pct
(Adds company comment, more details, background, shares)
FRANKFURT, June 17 German fertiliser and salt
maker K+S SDFG.DE is bracing for a more significant drop in
earnings and sales this year than previously forecast as farmers
continue to hold off on potash orders, it said on Wednesday.
"European agriculture exercised great restraint in the use
of potash fertilisers in the spring," the group said in a
The world's fourth-biggest potash maker abandoned hopes of a
recovery in potash demand in the second half, which it had
It added that there was no sign of any significant upturn in
demand in Europe, which accounts for almost two-thirds of the
company's fertiliser sales.
Larger rival Potash Corp (POT.TO) earlier on Wednesday
announced it would cut 2009 potash production by a further
800,000 tonnes, bringing curtailments this year to 4.7 million
It cited an "extremely slow U.S. spring season" and
protracted negotiations with China, the world's largest potash
Shares in K+S plummeted 12.8 percent to 42.95 euros at 1300
GMT, its Russian rival Uralkali (URKA.MM) dropped 7.2 percent,
while Norway's Yara International (YAR.OL), which focuses on
nitrogen fertiliser, lost 7.2 percent.
Prices of agricultural commodities followed the boom and
bust of financial markets over the last two years, as investors
rushed in and later abandoned the asset class, also buffeting
K+S reduced its sales volume expectations for potash and
magnesium fertilisers in 2009 to between 4 and 4.5 million
tonnes from 6 million tonnes previously, it added.
It plans to reduce potash production in the second half by
up to 2 million tonnes, following a reduction of 2 million
tonnes in the first half.
It also cut the European price of granulated potassium
chloride, the fertiliser mineral extracted from potash ore, to
435 euros ($603) from 555 euros previously and added that
overseas prices were also slipping.
The company had previously expected farmers to boost
production because grain inventories had been at historic lows,
but fertiliser demand remained sluggish as growers put orders on
hold in anticipation of a further decline in prices.
(Reporting by Ludwig Burger; Editing by Rupert Winchester)