PotashCorp cut its forecast for the revival in global potash next year, and warned it would continue mothballing capacity, as it unveiled an 80% slump in third-quarter earnings and tempered hopes for the full year.

Bill Doyle, the fertilizer giant's chief executive, admitted that the downturn in fertilizer markets, sparked by collapsing crop prices and tighter credit last year, had proved unexpectedly long-lasting.

"The uncertainty among fertilizer buyers has lasted far longer than we anticipated," he said.

While stressing that the slowdown  could not "continue indefinitely", the group cut to 50m tonnes, from 55m-60m tonnes, its forecast for global demand for potash - its prime product - next year and warned that low crop prices could depress consumption even further.

While an improvement on this year's figure, the estimate implied "continued curtailments" at its potash mines.

China stand-off 

The Canadian group blamed the potash market's lingering woes in part on China's refusal to follow India in signing new supply agreements, which many observers believe will put a floor under the sagging potash market.

Producers' efforts to underpin the potash market has resulted in a less material, but more prolonged, drop in prices than those for nitrogen and phosphate nutrients.

Although PotashCorp had hoped India's deal would "inspire confidence" in other markets, "this failed to materialise".

"Potash buyers appeared to respond instead to… healthy producer inventories, lack of engagement by Chinese buyers and a late US harvest," the company said.

"Dealers and farmers continued to buy potash only on an as-needed basis."

Earnings slide 

PotashCorp's own potash sales fell 64% by value and 45% by volume in the July-to-September period.

Group revenues were, at $1.10bn, down 64% year on year, with earnings tumbling to $248.8m from $1.24bn a year before,

On a per-share basis, earnings came in at $0.82, at the lower end of the $0.80-1.20 range it had previously guided to.

The company added that fourth quarter earnings would hit $0.65-0.85 a share, bringing the full year figure to the "low end" of the guidance range.