Nutrien Ltd. announced last week it plans to increase fertilizer production capability in response to structural changes in global energy, agriculture and fertilizer markets.
“The challenge of feeding a growing world has never been clearer as global supply constraints have contributed to higher commodity prices and escalated concerns for global food security," said Ken Seitz, Nutrien’s interim president and CEO.
"There is no simple or fast solution to overcome this challenge and we see potential for multi-year strength in agriculture and crop input market fundamentals."
Seitz added Nutrien’s integrated business is best positioned to respond to these supply challenges and help sustainably feed a growing world.
"We are safely bringing on additional low-cost potash and nitrogen production from our existing facilities, while delivering the products, services and solutions growers need through our global retail network,” he said.
Accelerating potash production ramp-up
Nutrien is accelerating the ramp-up of its annual potash production capability to 18 million tonnes by 2025 in response to the uncertainty of supply from Eastern Europe.
This represents an increase of more than 5 million tonnes, or 40%, compared to production in 2020.
"The acceleration pathway is through existing low-cost capacity that is unmatched in the industry and supported by world-class global logistics infrastructure," the company said in a release.
The incremental production capability is expected to be added at a similar annual pace to the additions over the past two years.
To boost production, the company will hire and train approximately 350 people and invest in underground mining equipment, mine development, storage and loadout capacity.
Nutrien continues to evaluate additional low-cost brownfield expansion opportunities beyond 18 million tonnes at its Saskatchewan mines that would supply longer-term market demand growth.
Potash prices soar with Ukraine war
According to a Reuters report, potash prices have soared since the West imposed sanctions against Russia for Moscow’s invasion of Ukraine, crimping an already tight fertilizer market.
Russia and Belarus, which also faces sanctions, are the world’s second- and third-largest producers of the crop nutrient, while Canada is the number one producer.
Seitz said it will take at least several years to replenish global crop supplies and for Russian and Belarussian potash trading volumes to return to normal levels.
