World potash shipments will set a record in the first half of 2014, but may struggle to match this feat in the second half, depending on the momentum of a restocking programme, PotashCorp said.
World potash volumes will likely come in at some 29m tonnes in the first six months of 2014, boosted by a scramble among wholesalers to rebuild inventories they ran down late last year, amid the market uncertainty caused by the break-up of the Belarus-Russian cartel BPC.
"Significant market uncertainty during the second half of 2013 impacted demand," PotashCorp said.
However, use of potash by farmers "was not affected by uncertain market conditions to the same degree" as purchases by wholesalers, meaning that "world consumption exceeded shipments for the second consecutive year" in 2013.
With "improved market engagement" this year, shipments had picked up markedly, notably in North America, where shipments were, at 4.8m tonnes, up 32% year on year in the first five months of 2014.
"This was due to a depleted wholesale and retail supply channel at the start of the year, followed by a strong spring season," Canada-based PotashCorp said.
In Brazil, imports of granular potash – the country's preferred grade, in which the size of pellets is more uniform than for standard potash – was up 850,000 tonnes "due to low beginning inventories and higher domestic demand".
However, it was as yet unclear as the extent to which the market would be able to extend this impetus, the volumes likely to fall nearer to about 26m-27m tonnes in the July-to-December half.
In markets, such as Asia, favouring standard grade potash, which is often cheaper, demand "has been impacted by global market uncertainty", PotashCorp said, highlighting too "government policy changes in India", after the elections this year which led to Narendra Modi becoming prime minister.
In India, the second-ranked potash importing country, "while reports indicate that India's new government could implement policies favourable for agriculture sector growth and the fertilizer industry, it is too early to determine if specific changes will be made to address the imbalance between nitrogen and potassium use".
Although it is considered unlikely that India will be able to lift subsidies for potash, or phosphate, fertilizers, it many commentators believe that some measure to boost their appeal compared with urea, on which subsidies have been focused, may be implemented.
PotashCorp restated a forecast of 55m-57m tonnes for world potash volumes this year.