VINACHEM

Mosaic Co., the world’s leading producer of two key crop fertilizers, dropped by the most since May 2022 as US tariffs led to fewer and costlier second-quarter phosphate sales.

US imports of phosphate and potash are down about 20% year-to-date, a pattern that looks to continue, according to Jenny Wang, the company’s executive vice president of commercial. Meanwhile, farmers have less to spend on nutrients as corn and soybean prices fall on “global trade uncertainty” and the anticipation of large harvests, according to the company’s earnings release. Shares fell as much as 13% Wednesday to the lowest price in three months.

Tariffs have “indirectly supported” increased prices for phosphate, with North American imports largely sold out for the quarter and at higher values than the spring season, Wang said on a Wednesday call with analysts. Morocco, China and Saudi Arabia are among the top global exporters of the key crop input. The company posted an $8 million loss in its phosphate earnings in the second quarter, as sales volumes fell and planned maintenance to boost future production took longer than expected.

Fertilizer demand in Brazil, another key market, has also been pressured during the summer soy-growing season. Around 20% of summer season inputs are yet to be purchased compared with 5% normally, though purchases for the future corn crop are running above pace, Wang said.

The Tampa-based company reported second-quarter sales volumes for phosphate and potash that trailed analyst estimates. Earnings per share missed even the lowest of analyst estimates compiled by Bloomberg, reflecting extensive maintenance. Mosaic is now returning to a normal cycle for turnarounds, chief executive officer Bruce Bodine said.

Mosaic said phosphate demand elsewhere in the world is absorbing some of the volumes no longer bound for the US. Increased government support in India, for example, has brought importers back to the market, Bodine said. The company also expects “significant earnings growth” in Brazil in the second half of the year.

“Put simply, there is not enough phosphate fertilizer available to meet demand, and we expect this dynamic to continue well into 2026, even if there is some demand deferral in the Americas,” he said.

The company said rising phosphate prices offset lower second-quarter volumes to keep net sales flat, while higher prices for potash boosted net sales up from the prior year. The company sees “no signs” of prices resetting in the second half of the year like what has occurred in previous years, Bodine said. Potash, a key fertilizer largely produced in Canada, is among the goods exempt from US tariffs under a North American trade agreement.

The company said it remains optimistic as “any demand deferral or reduction exiting 2025 sets the stage for strong demand in 2026, as nutrients removed from this year’s crops need to be replenished.” Scotiabank analysts Ben Isaacson and Lucy Zhou called the quarter a “light miss,” noting continued cost-cutting and no operational red flags in a Wednesday note.