Potash prices have soared since the West imposed sanctions against Russia for Moscow’s invasion of Ukraine, crimping an already tight fertilizer market.

Russia and Belarus, which also faces sanctions, are the world’s second- and third-largest producers of the crop nutrient, while Canada is the No. 1 producer.

“The world needs these volumes in order to feed people well,” said Ken Seitz, Nutrien’s interim CEO, at a meeting with investors.

Seitz said it will take at least several years to replenish global crop supplies and for Russian and Belarusian potash trading volumes to return to normal levels.

Nutrien’s expansion falls well short of fully replacing the eastern European production. The world is short 10 million tonnes from that region and Nutrien’s extra output of three million tonnes annually by 2025 should be quickly absorbed, said RBC Capital Markets analyst Andrew Wong.

The potash ramp-up will use Nutrien’s existing mines in the province of Saskatchewan.

Wong estimated the expansion’s cost at $300 million to $900 million (all figures US$).

The company said it was advancing previously announced boosts of its nitrogen fertilizer capacity to add 500,000 tonnes annually by the end of 2025, and is considering further expansion.

Nutrien also said it plans to repurchase an additional $2 billion worth of shares.

— Reporting for Reuters by Rithika Krishna in Bangalore and Rod Nickel in Winnipeg.

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Global agriculture demand and prices for crops picked up pace in the fourth quarter of 2021, thanks to economies reopening and a rebound in the ethanol sector on easing COVID-19 lockdowns.

“Over the medium to long term, we see constructive fundamentals continuing, as possible new demand to support renewable fuels such as bio-based diesel will likely support healthy agricultural commodity price levels,” CEO Chuck Magro said on a call with analysts.

Corteva said it expects high fertilizer prices to prompt some growers to rotate into soybeans from corn and boost demand for Enlist, its next-generation biotech soybean seeds and complementary herbicides.

U.S. plantings of corn, which requires more fertilizer than soybeans, could be limited in 2022. A shortage of nitrogen fertilizer due to soaring natural gas prices is threatening to reduce global crop yields, according to a major producer of the crop nutrient.

Enlist’s market share of the total U.S. soybean planted area could grow to at least 40 per cent this year from 35 per cent in 2021, Corteva said on Thursday.

The company, spun off in 2019 after a merger of Dow Chemical and Dupont, on Wednesday forecast better-than-expected sales of $16.7 billion to $17 billion this year (all figures US$).

“For a new CEO to arrive in the midst of an incredibly difficult operating environment and guide to $16.7 billion to $17 billion of sales is quite solid,” Mizuho Securities analyst Christopher Parkinson wrote in a note.

— Reporting for Reuters by Rithika Krishna in Banaglore.

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Nutrien said in a statement it named Ken Seitz, the head of its potash business, as interim chief executive after Mayo Schmidt stepped down as CEO. The company gave no reason for Schmidt’s departure and spokesperson Megan Fielding said there are “legal constraints” on what Nutrien can say about it.

Fielding said the leadership change will not affect Nutrien’s strategy.

“It’s mighty perplexing to me,” said Brian Madden, senior vice-president at Goodreid Investment Counsel, a Nutrien shareholder. “Feels like lightning striking twice in the same place to see two peculiar, abrupt transitions within a year.”

Soaring prices of potash fertilizer, due to rising demand and supply problems for Nutrien competitors, have put a charge into the company’s profits. Its third-quarter net income was the highest for that period in the company’s four-year history, since forming from Agrium’s acquisition of PotashCorp.

Under Schmidt and Seitz, Nutrien boosted potash sales and was examining restarting idled mine capacity to raise production further to capitalize on high prices.

Nutrien’s U.S.-listed shares dropped 3.8 per cent. The change raised investor questions about senior leadership dysfunction and strategy at the company, said Scotiabank analyst Ben Isaacson.

Nutrien’s board is chaired by Russ Girling, a former CEO at pipeline company TC Energy, and also includes former Barrick Gold CEO Aaron Regent.

Schmidt, Nutrien’s former chairman, took the CEO job in April, replacing Chuck Magro. Schmidt, whose resume also includes stints as CEO at grain firm Viterra and Ontario power utility Hydro One, did not respond to requests for comment.

Seitz joined Nutrien as executive vice-president in charge of potash operations in 2019. He previously led Canpotex, a potash export company owned by Nutrien and Mosaic Co.

Girling, in Nutrien’s release, said the board will now “begin a global search to select a long-term leader that will take the company into its next phase, which will consider internal and external candidates.”

— Reporting for Reuters by Rithika Krishna in Bangalore and Rod Nickel in Winnipeg.

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Demand for pot edibles such as gummies has risen during the pandemic, as people stuck at home turn to cannabis-related products for relaxation and entertainment.

“The categories that resonate the most with consumers, particularly in THC space are gummies and beverages, we continue to look at other ways of consumption but these two seem to be the ones that are taking off,” Canopy CEO David Klein told Reuters.

Tetrahydrocannabinol or THC is the ingredient in marijuana that gets users ‘high.’

Wana sells gummies in the U.S. state of Colorado and licenses its intellectual property to partners who manufacture, distribute and sell Wana-branded gummies in states including California, Arizona, Illinois, Michigan and Florida.

Canadian pot producers are looking at cross-border expansion, as the industry has garnered investor interest with some U.S. states legalizing pot and on increased expectations for federal marijuana reform.

“We remain more bullish than others in the regulatory front and feel that our ecosystem in the U.S. is strong enough to grow even without federal permissibility happening in the short term,” Klein added.

U.S.-listed shares of Smiths Falls, Ont.-based Canopy, down 46 per cent so far this year, rose nearly two per cent to US$13.55 in premarket trade.

The acquisition will provide Canopy access to Wana’s vertically integrated facility in Colorado and its licensing division, the company said, adding that it would continue operating independently in the state until the deal closes.

The transaction is structured as three separate option agreements allowing Canopy Growth a call option to acquire 100 per cent of the membership interests in each Wana entity, the company said in its statement.

— Reporting for Reuters by Rithika Krishna in Bangalore.

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Mosaic’s K1 and K2 mine shafts at Esterhazy, Sask., about 75 km southeast of Yorkton, have long been prone to flooding, forcing the company to continuously pump out salty water.

The company has been building a new shaft, K3, to eliminate the problem and its associated costs.

Mosaic decided to close the K1 and K2 shafts nine months early when the water inflow accelerated beyond the company’s pumping capacity, said CEO Joc O’Rourke.

“There would have been potential for safety issues, so we felt the right thing to do was to accelerate the shutdown,” O’Rourke said in an interview.

No workers have been injured, he said.

Florida-based Mosaic accounts for 13 per cent of global potash production, according to Scotiabank, and also produces phosphate fertilizer. The closure will cut Mosaic’s potash production by one million tonnes until the company can fully ramp up production at K3 by March 2022.

O’Rourke said it was unclear how soon Mosaic could restart its idled Colonsay, Sask. mine, about 65 km east of Saskatoon.

Mosaic’s production cut comes as global potash prices climb, following soaring corn and soybean prices. Potash is a crop nutrient that farmers apply to increase yields.

“This will put more stress on the potash market,” O’Rourke said, estimating Mosaic’s cut represented a two to three per cent global supply reduction.

The impact of the closure will be minimal for workers as Mosaic moves employees from the closed mine shafts to K3, O’Rourke said. Labour union Unifor Local 892 said it was meeting with Mosaic about the decision.

Once K3 reaches full capacity next year and Colonsay returns to service, Mosaic forecasts its annual potash production to increase by two million tonnes from 2020 levels.

For the second quarter this year, Mosaic expects to record $20 million to $25 million in brine management cash expenses and $80 million to $100 million related to writedowns for the remaining assets at K1 and K2.

— Reporting for Reuters by Rod Nickel in Winnipeg and Rithika Krishna in Bangalore.

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