Mosaic boss Jim Prokopanko flagged an "outstanding" outlook for the fertilizer sector even as the nutrient group unveiled an unexpectedly large drop in earnings, blamed on factors from Hurricane Isaac to low river water levels.

Mr Prokopanko, the chief executive of the US-based group, said that fertilizers, whose prices stagnated even as crop values soared this summer, "have never been more affordable" to farmers being given by ag markets "strong incentives to use our products to increase crop yields".

Drought setbacks to crops in a range of countries, including the US, "provided a vivid reminder of just how tenuous global food security is", highlighting the importance of nutrients in supporting farm productivity.

"The long-term outlook for crop nutrition is outstanding, and Mosaic is well-positioned" as the world's largest producer of phosphate and potash combined, he said.

'Weak international demand'

However, the comments came as the group revealed that it had "slowed production" of potash in the June-to-August quarter due to "soft demand in India and China", major importing countries.

Mosaic said it ran its mines at 65% of capacity, compared with the 70% forecast, "due to longer planned [maintenance] turnarounds and weak international demand for standard product".

In phosphates, the group's main earner, sales tumbled 30% to $1.6bn, reflecting lower prices and sales volumes, which were restrained by "longer annual maintenance shutdowns and challenges posed by hurricanes", notably Hurricane Isaac, which hit the US in late August.

Indeed, while the group's phosphate rock production soared 36% to 3.8m tonne during the quarter, its output of finished output slid 9% to 2.0m tonnes.

Mosaic added: "Our sales were further impacted by low Mississippi river levels," a result of the US drought, and a factor which has hampered delivery of many products on a major barge route.

Profits drop

The group reported earnings down 18.4% at $429.4m, on revenues down 18.8% at $2.51bn.

Earnings per share dropped to $1.01 a share from $1.17 a share a year before, and well below the marginal drop to $1.15 a share that Wall Street had expected.

Mosaic shares closed down 3.9% at $55.76 in New York.