Nutrien CEO sees potash demand growing despite headwinds
The Canadian government may need to step in and offer aid to the country’s canola farmers after China suspended shipments of the crop last month, according to the chief executive of the world’s largest potash producer.
“What we have to do is pay very close attention to the profitability of our Western Canadian farmers right now,” Nutrien Ltd. (NTR.TO) CEO Chuck Magro told BNN Bloomberg on Wednesday. “They may need a similar package to what the Americans have done for the soybean farmer, with direct financial aid, because this will take some time to find alternate markets for our products.”
Canadian canola has been under extreme pressure after China banned shipments from two major producers – Viterra Inc. and Richardson International Ltd. – in April over claims that the companies’ shipments contained pests.
The Trudeau government expanded its loan program to farmers on May 1 to help weather the Chinese ban, but the country’s Conservative opposition has called for greater aid, as election rhetoric ramps up. Stateside, Donald Trump’s government pledged US$16 billion to farmers last week to offset the escalating costs of his ongoing trade war with China.
Magro said that Nutrien – the company that was formed following the 2018 merger of The Potash Corporation of Saskatchewan and Agrium Inc. – is doing its part to support the Canadian canola industry.
“We’re extending credit right now to help them financially, our agronomists are working with the canola farmers to help them move to other crops, but canola is a very profitable crop for the Western Canadian farmer and that is our concern right now,” he said.
“The world will need the canola, so the Canadian farmer will find a market, but the Chinese [have been] by far the largest canola purchaser for many years, so that’s going to time.”
While Magro said he was “unsure” whether the ban could evolve into a permanent blackout on Canadian canola shipments to China, he said that the government needs to continue to examine the effect the move is having on Canadian farmers.
“They understand, I think, the urgency of this matter and they’ve taken good steps, but I would call them early steps,” Magro said.“I think everything should [be] and is on the table, because we can’t have our Western Canadian farmers in the next 18-months-to-two-years enter significant financial duress,” he added. “That would be very difficult for our farmers to recover from.”