Mosaic Company said it was "unwavering" in its optimism despite an 83% slump in earnings for the fourth quarter, when its biggest division – phosphates – came within an ace of reporting a loss.

Operating profits at the fertilizer giant's phosphates unit slumped to $2.3m for the March-to-May period from $797.4m a year before as it suffered a drop of 21% in sales volumes, despite a halving in prices.

The fall reflected "cautious purchasing" by customers amid a period of weak economic conditions and volatile crop prices, Mosaic said, echoing comments from rival nutrient groups.

Sales of potash tumbled 73% by volume, but firm prices helped the nutrient achieve $198.6m in profits, down 40% year on year.

'Demand rebounding'

US-based Mosaic, noting a "lack of normal contracting activity" in potash, declined to give its usual forecast on volumes and prices for the nutrient, saying it would wait "until market conditions normalise".

However, the group said that recent potash deals should raise buyers' confidence and sales volumes, albeit at lower prices.

"Profit margins will decline... but remain at historically attractive levels," Mosaic said.

In phosphates, the company forecast a tripling of sales volumes, quarter on quarter, to 1.9-2.2m tonnes in the June-to-August period, although prices would continue to decline.

"Demand is rebounding in major markets around the world and sales volumes are improving," the statement said.

'Positive trends' 

Jim Prokopanko, the Mosaic chief executive, added that the group's optimism about the future was "unwavering", with the company "poised to capitalise on the positive trends we foresee in potash and phosphates markets".

Economic growth in developing countries was fuelling the growing of a new middle class with "the financial wherewithal to improve their diets", Mosaic said.

"This long-term trend, along with steady population increases, translates into continued demand for crop nutrients."

Industry downturn 

Group earnings came in at $146.9m, compared with $862.5m a year before, on revenues down 54% at $1.59bn.

Mosaic's results come amid a difficult period for fertilizer groups which, after seeing sales soar amid the commodity price boom, have suffered steep drops in sales as lower crop prices prompt cuts to farm budgets.

However, price cuts appear to have prompted some rebounds in sales, with Norway's Yara International last week reporting that discounts had revived nitrate volumes.

Russia's Silvinit two weeks ago broke ranks with rival potash groups by selling to India at $460 a tonne, compared with the price of about $700 a tonne that competitors had been sticking too.