INTERVIEW-Mosaic CEO sees rise of spot fertilizer market
* CEO sees rise of spot market over contracts, futures
* Says Mosaic not for sale
ORLANDO, Fla., Jan 14 (Reuters) - Fertilizer is increasingly being sold in spot deals rather than long-term contracts as buyers prefer to play safe while the global economic outlook remains uncertain, the chief executive of Mosaic Co (MOS.N) said on Thursday.
"It's effectively becoming a spot market," said CEO Jim Prokopanko of the leading global producer of concentrated phosphate and potash crop nutrients, which is majority owned by the private food giant Cargill Inc [CARG.UL].
"We're prepared to sell that way. But if it's a spot market, it's definitely going to be a different price" than a long-term contract, he told Reuters in an interview at Mosaic's "Ag College" in Orlando this past week to educate customers about trends for 2010.
Spot -- or short-term -- prices can fluctuate wildly depending on many factors, while contracts give buyers long-term assurance their costs will remain the same.
The trend toward spot markets doesn't seem to worry Prokopanko, as spot prices tend to be higher than long-term contract prices and demand is always there.
"They've got a planting season come," he said. "They have limited available supplies." ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on global fertilizer supply and demand: link.reuters.com/fyd43hX
Graphic on Mosaic's earnings and stock performance: link.reuters.com/byd43h ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Fertilizer makers took a beating in 2009 as farmers bought less in the face of lower crop prices, but demand is expected to rebound in 2010 due to increasing interest from developing nations with rising populations.
Early signs of a rebound include higher tractor sales in Brazil and other large food-producing nations.
Asked if Mosaic was for sale as the industry consolidates, Prokopanko gave an emphatic "no" but went out of his way to paint the company as a very attractive acquisition.
Agrium (AGU.TO) is attempting to buy CF Industries (CF.N), which itself on Thursday gave up a bid to buy Terra Industries TRA.N.
Prokopanko, 56, spent much of his career in Cargill before joining Mosaic's board when it was created in 2004. Since becoming CEO in 2007, he has pushed the company to become an industry leader.
(Reporting by Ernest Scheyder; Editing by Richard Chang)
((ernest.scheyder@thomsonreuters.com; +1 646-223-6119; Reuters Messaging:ernest.scheyder.reuters.com@reuters.net)) Keywords: MOSAIC/
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