Agrium became one of the first fertilizer groups to detail damage to its prospects from the market tumble following the break-up of the Belarusian Potash Company, as it warned of 60% slump in nutrient manufacturing profits.
The Canadian-based fertilizer and farm retail group said that while operating profits at its stores were holding up in the current quarter, which ends next Monday, those at its wholesale fertilizer operations would dive by about $200m.
That represents a fall of some 60% from $312m the operating profit the division achieved in the July-to-September quarter of last year.
And it reflected "soft nutrient prices, combined with lower sales volumes… across all three nutrients", nitrogen, phosphate and potash, Agrium said.
Fallout from BPC break-up
The comments come nearly two months after the break-up of the BPC potash cartel by Russia's Uralkali, which cautioned that the move could lead to a slump of 25% or more in prices of the nutrient.
However, as fertilizer group such as Russia's PhosAgro have warned, the uncertainty caused by Uralkali's move has spread to other fertilizer markets too, encouraging buyers to wait to see if potash price weakness will spread.
Credit Suisse, for instance, has pointed out that phosphate values are rarely $100 a tonne above those for potash.
Agrium said that "customer demand has been delayed across all three nutrients this quarter," adding that volumes of potash would be "about 30% lower than normal for a third quarter".
The group's wholesale division sold 160,000 tonnes of potash in the July-to-September period of 2012, and 347,000 tonnes in the same quarter of 2011.
For nitrogen and phosphate fertilizers, it expected sales volumes down 20-30% year on year in the current quarter.
In the July-to-September period last year Agrium's wholesale operations sold 1.06m tonnes of nitrogen and 105,000 tonnes of phosphates.
"Benchmark nutrient prices are 20-30% below the same period last year," the group added.
Agrium chief executive Mike Wilson said that despite the "short-term headwinds" for the wholesale business, the group's long-term prospects "remain strong".
The group unveiled a rise of $1.00 per share, to $3.00 per share, in its annual dividend, to be paid in equal quarterly instalments, and representing a yield of 3.3%, using the closing price of Agrium shares on Friday.
"The dividend increase demonstrates our confidence in the ability of the business to generate significant cash flow and is an indication of the strength of our position across the crop-input value chain," Mr Wilson said.
Agrium shares stood 2.6% lower at $89.97 in morning deals in Toronto.