CRISIS OF OVERPRODUCTION

Fertilizer producer Mosaic says stockpiles too high to restart Canadian mine

Story by By Rod Nickel • 

WINNIPEG, Manitoba (Reuters) - Fertilizer producer Mosaic Co does not currently see the right market conditions to restart its idled Canadian potash mine, with high inventories in the key markets of the United States and Brazil and cold weather slowing train movement of the crop nutrient from Canada, Chief Executive Joc O’Rourke said on Wednesday.

Mosaic Co curtailed potash production in December at its Colonsay, Saskatchewan, mine, but said then that it expected to restart in early 2023.

"It's just a matter of starting to see the inventories coming down," O'Rourke said in a Reuters interview. "The last thing we want to do is start it up, run it for a month and a half and have to shut it down again."

O'Rourke declined to be more specific on timing for restarting the mine, which was producing at an annual rate of 1.3 million tonnes when it shut down.

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"I think once we get through the first quarter, we can certainly be moving a lot more product," he said. "But I'm being cautious about what to say until we see that movement."

Spring is the busiest time of year in North America for potash applications, ahead of planting.

Producers of potash fertilizer are banking on a return to stable prices in 2023 after disappointing demand late last year in the United States and Brazil forced some like Mosaic to slow output.

Potash prices had initially spiked last year, contributing to food inflation, after Russia invaded Ukraine, prompting Western countries to issue sanctions on Russia's banking system that have slowed its potash exports.

(Reporting by Rod Nickel in Winnipeg; Editing by Chris Reese and Aurora Ellis)