Intrepid Potash underlined the weakness in potash markets by saying its own sales had fallen by at least 14%, sapped by a "sense of economic unease" among farmers.

The group, the biggest potash producer in the US, said that its sales of the nutrient had reached 175,000-185,000 tonnes in the October-to-December period, below the 216,000 tonnes recorded in the same quarter a year before.

The rate of increase in potash prices too had slowed, with Intrepid selling the fertilizer at an average of $490-500 per short ton, up more than $100 a ton year on year, but only marginally from the $489 a ton recorded in the July-to-September quarter.

'Sense of economic unease' 

The performance was "reflective of the decreased farmer demand for fertilizer experienced in the latter half of the fourth quarter of 2011", Intrepid said, blaming the slide in the broader economic woes.

"This pause in demand was the direct result of farmers feeling a sense of economic unease over the general global market uncertainty resulting from the European debt crisis, political gridlock in Washington and the slow pace of economic recovery."

Against this backdrop, "farmers chose to focus on seed and equipment purchases and to defer purchase of their fertilizer inputs".

Sector trend 

The comments follow warnings from peers such as Germany's K+S, Russia-based Uralkali and North American rivals Mosaic and PotashCorp of softer potash markets, with Mosaic warning two weeks ago that "macroeconomic uncertainty has caused distributors around the world to become cautious".

PotashCorp, the world's top producer group by capacity, has unveiled temporary shutdowns at three Canadian mines in a bid to better match output with demand.

Intrepid said its own output reached 190,000-200,000 tonnes during the latest quarter, beating sales and tallying with data showing a rise in potash inventories in North America, which is, with Russia/Belorussia, one of the two main areas for mining the nutrient.

PotashCorp on Friday said that these inventories jumped by more than 400,000 tonnes to 2.5m tonnes last month, their highest for nearly two years.

Rebound ahead?

However, Intrepid joined peers in stressing delays in, rather than destruction of, fertilizer demand, believing farmers had deferred orders "until the spring of 2012".

The group also forecast a jump in its capital investment in 2012 to $225m-300m, from $135m-140m last year, to fund projects including extra processing capacity at its New Mexico operations, and new mining facilities in Utah.

Running up to the trading update, Wall Street was forecasting a rise of more than 50%, to $0.37 a share, in Intrepid's fourth quarter earnings.

Full-year earnings were pegged at $1.39 a share, more than double those for 2010. Earnings for 2012 were pegged at $1.77 a share.

Credit Suisse analysts cut to $26, from $29, their price target for Intrepid Potash shares. Nonetheless, the stock closed up 1 cent at $24.98 in New York.