* Q3 EBITDA ex-items NOK 4.19 bln vs 4.15 bln in poll
* Lower prices offset by higher sales volume
* Higher Chinese export tax Nov. 1 to impact prices
* Shares down 1.9 pct
(Adds CEO's comment, further details, share price)
By Victoria Klesty
OSLO, Oct 19 High food prices after a
devastating drought will support global fertiliser markets even
as European farmers continue to delay their purchases, top
fertiliser firm Yara said.
World food prices remained high over the last quarter,
increasing farmers' incentives to buy and use fertilisers, but
cheaper Chinese products put pressure on prices of
nitrogen-based fertilisers and dented Yara's profits despite
The Norwegian company however now expects the combination of
less costly fertilisers and more expensive grain to boost
farmers' margins and encourage them to apply more fertiliser in
the upcoming season.
"Pre-buying incentives for the new season are significantly
stronger than a year ago," it said in a statement on Friday.
Yara's core European market is, however, likely to see
farmers again delay their purchases ahead of the main fertiliser
application season, Chief Executive Joergen Haslestad said.
"Despite increased grain prices and improved farm margins,
buyers in Europe remain cautious, partly influenced by the
negative macroeconomic environment," Yara said.
The company said its average realised prices were lower in
the third quarter for all main product groups but deliveries
were up 4 percent compared to a year earlier.
"Lower European nitrate deliveries were partly offset by
strong nitrate sales growth in Brazil," Yara said.
How long European farmers can afford to put off purchases
could be influenced by possible changes in global fertiliser
prices due to an expected rise in Chinese export taxes.
Nitrogen fertiliser prices have declined from a year ago,
with benchmark urea prices down 19 percent since October 2011,
as Chinese export prices are now lower than last fall, when the
effective Chinese export tax was at 110 percent compared to the
current 10 percent.
"What we do know for sure (is) there will be a 110 percent
tax regime from Nov. 1. How much (of Chinese exports) will be
let in the next months to come is difficult to say, but it can
have effect on urea price going forward," Haslestad said.
He told Reuters that while he did not want to speculate over
future urea prices, he would be "very surprised" to see urea
prices going down after Nov. 1.
World food prices continued to rise in September after the
worst drought in more than 50 years in the United States sent
corn and soybean prices to record highs over the summer, while a
drought in Russia and other Black Sea exporting countries raised
fears of a renewed crisis.
Food prices are seen remaining close to levels reached
during the 2008 food crisis, the Food and Agriculture
Organisation's (FAO) said earlier this month.
"Grain markets are extremely tight due to the drought in the
US cornbelt and concern about the declining outlook for yields,"
Citi said in an analysis. "We believe prospects for 2013 are
Yara on Friday reported adjusted earnings before interest,
tax, depreciation and amortisation (EBITDA), excluding one-off
items, fell to 4.19 billion crowns ($744.54 million) in the
third quarter from 4.21 billion in the year-ago period, while
analysts had on average expected 4.15 billion.
Its shares were down 1.85 percent at 1124 GMT.
(Additional reporting by Henrik Oliver Stolen; Editing by