(Adds 2010 production cuts, comments and background)
MOSCOW Oct 30 Russian potash miner Uralkali
(URKA.MM) will cut production of potash fertilisers by 500,000
tonnes this year to 4.9 million tonnes due to adverse market
conditions, it said on Thursday.
Its output for 2008 will therefore fall 8.4 percent short
of its production capacity for the year of 5.35 million tonnes.
The revised 2008 output also implies a 3.9 percent decline from
last year, when Uralkali produced 5.1 million tonnes of
In early 2010, Uralkali will also shut down one of its
production lines in the Perm region for repairs, slashing the
company's maximum output for that year by more than 20 percent
to 5.5 million tonnes from 7 million tonnes, it said in a
Uralkali's Belarus-based export agent, Belarussian Potash
Company, supplies around a third of the world's potash
The move to curtail production in 2008 was prompted by the
global credit crisis and its impact on demand for fertilisers.
The company previously reported an output rise of 7.3
percent in the first nine months of this year to 4.03 million
"The decision ... is prompted by the current decrease in
potash fertilisers purchase in the global market ... The
planned reduction in production offers Uralkali a good
opportunity to repair and modernise its facilities that for the
last several years have been used at their full capacity," it
"Liquidity crisis is hindering the farmers' ability to
purchase and use fertilisers," it added.
Uralkali, whose billionaire majority owner Dmitry
Rybolovlev is ranked Russia's joint 12th-richest man by Forbes
magazine, has said its first-half 2008 net profit more than
tripled to $562 million as it hiked prices and demand for
Potash prices reached record levels of around $1,000 per
tonne in September, having quadrupled in the course of a year
as record demand for the nutrient coincided with a supply
The soaring prices boosted shares in such producers as
Uralkali and Canadian miner Potash Corp (POT.TO).
(Reporting by Dmitry Zhdannikov; Editing by Christian