* To cut potash production by 1.5 mln tonnes
* Still expects strong rebound in second half
* Jobs of 940 employees to be temporarily affected
* Shares close up 2.7 pct on Toronto Stock Exchange
(Adds details on jobs affected, share price move, by-line)
By Euan Rocha
TORONTO, March 17 Potash Corp of Saskatchewan
(POT.TO), the world's largest fertilizer producer, plans to
further curtail potash production after recent industry data
showed that North American potash inventories have risen.
The output cuts reflect a continuing near-term drawdown of
inventories as customers work through stockpiles built up
before the global economic crisis hit, Potash Corp said in a
statement posted to its website on Monday.
The company said it plans to reduce 2009 potash production
by an additional 1.5 million tonnes, bringing the total
expected curtailments of operational capacity this year to at
least 3.5 million tonnes.
Potash Corp said it still expects a strong rebound in
potash demand in the second half of 2009 that should continue
The latest data from the Fertilizer Institute indicates
that potash inventories at North American producers are 42
percent higher than the previous five-year average. At the end
of February, they were 110,000 tonnes higher than the month
North American potash shipments in both domestic and export
markets were nearly nonexistent in February, down 80 percent
from the year-earlier level to another record low of 200,000
tonnes, Bank of America/Merrill Lynch analyst Steve Byrne said
in a note to clients.
In a separate research note, BMO Capital Markets analyst
Edwin Chee lowered his 2009 and 2010 earnings estimates for
Potash Corp and also cut his share-price target for the
The new round of production curtailments will affect about
940 workers at the company's Lanigan, Allan and Rocanville
mines in Saskatchewan, a company spokesman said.
Only about two-thirds of the 940 employees will be
temporarily laid off, while the remainder will be recalled to
handle maintenance-related functions.
Potash Corp has about 5,300 employees across the globe,
with a little less than half of those based within Canada.
Many of the impacted employees had already been out of jobs
for the last eight weeks, due to the company's initial round of
potash production curtailments, which were announced in
The temporary lay-offs at Rocanville will last for four
weeks, while those at Allan and Lanigan will be in place for
another eight weeks, the company spokesman said.
Shares of Potash Corp closed up C$2.56 at C$98.98 Tuesday
on the Toronto Stock Exchange.
($1= $1.2686 Canadian)
(Reporting by Euan Rocha; Editing by Peter Galloway)