* Potash inventories fell by 422,000 tonnes in December
* Inventories currently 45 pct above prior 5-year average
TORONTO Jan 18 North American potash
inventories at the manufacturer level fell in December,
according to Potash Corp of Saskatchewan (POT.TO), the world's
largest producer of the crop nutrient.
North American inventories fell 422,000 tonnes in December
to below 3 million tonnes for the first time since 2008,
according to the most recent data posted on the company's
The drawdown indicates output cuts implemented by North
American producers are finally helping rein in inventories,
which grew steadily through the first-half of 2009, as vendors
and farmers stung by high potash prices and weak grain prices
drastically cut purchases.
Potash prices, since peaking at over $1,000 a tonne in
2008, have fallen sharply to around $350 to $400 a tonne,
helping draw buyers back into the market.
A mild fall season in North America also allowed farmers to
squeeze in some fertilizer application toward the end of 2009,
despite a late harvest season across most of the continent.
However, statistics still indicate that North American
potash inventories are 45 percent above the prior five-year
average, although most producers and analysts forecast a sharp
increase in potash demand this year, as farmers begin to
replenish soil nutrient levels after a bumper harvest in 2009.
(Reporting by Euan Rocha; Editing by James Dalgleish)