ABB Grain has cut its earnings forecast for a second time, warning that the thaw in the global fertilizer market had yet to reach Australia, in the second profits downgrade in two days from Australia's agribusiness giants.

The Adelaide-based grain handler cut to Aus$33m-43m its forecast for earnings in the year to the end of September, down Aus$10m on both ends of the range.

The reduction, following a similar cut in July, leaves the company potentially on course for a near-halving in earnings, once one-off charges of Aus$8m are factored in.

The warning comes the day after Nufarm, the agri-chemicals group, cut its estimate of net operating profits for the year to the end of last month to Aus$135m-145m compared with an earlier projection of Aus$187m.

Buyers' strike 

ABB blamed its latest warning on a "continued deterioration" in Australia's fertilizer market, which has forced it to take a further writedown on the value of the inventory held by its nutrient distribution division.

A long list of companies has been hurt by the slump in fertilizer prices which set in last autumn, as lower crop prices and tighter credit prompted farmers to cut back spending.

However, while many fertilizer producers are reporting some upturn in demand, albeit at far lower prices than a year ago, ABB said that Australian growers were still holding out for further discounts.

"While the world fertiliser price has recently begun to show encouraging signs of price support, the Australian market has seen a further reduction in prices," Perry Gunner, the ABB chairman, said.

Many farmers were "choosing to defer" fertilizer purchases in light of the reductions, he added.

Market reaction 

ABB, which has agreed a takeover by Canada's Viterra, confirmed that the profits alert would have no impact on its recommendation to support the deal.

Its shares, supported by the bid, closed up Aus$0.12 at Aus$9.40 despite the warning.

However, shares in Nufarm slumped 6.1% to Aus$11.34 on Friday. While the group has been approached by Chinese chemicals giant Sinochem over a deal, the group added in Thursday's statement that there was "no assurance that any agreement will be reached".