(Bloomberg) -- Shares of Nutrien Ltd. rose to a six-month high after the world’s largest maker of crop nutrients stuck by its forecast for bigger profits this year.

Increased sales volumes for nitrogen and potash and lower costs for natural gas, a key ingredient for fertilizer production, helped Nutrien top analysts’ profit forecasts for the first quarter. 

Fertilizer companies have struggled with tumbling prices after a record-breaking surge following Russia’s 2022 invasion of Ukraine was soon followed by a slump. Nutrien now is counting on robust fertilizer demand in the US, where farmers are currently planting corn and soybeans, and improved conditions in Brazil later this year to help the Canadian company achieve its goal of higher profit in 2024. 

“North American demand has been strong, and we believe distributors will attempt to end the spring season with limited inventory,” Nutrien Chief Executive Officer Ken Seitz told analysts on a conference call on Thursday. 

Shares of the company rose as much as 4.9% in Toronto. The stock is up almost 20% over the last three months.

Nutrien’s sales of $5.39 billion during the first three months of the year came in about 2.9% above the average of analyst estimates compiled by Bloomberg. Still, the first-quarter bright spots weren’t enough to prevent net earnings from plunging by 71% to $165 million amid lower fertilizer prices. 

China

Nutrien said China potash imports were strong in the first quarter, driven in part by the Asian country’s focus on domestic food security. Still, imports are expected to decline for the full year compared to record levels in 2023.

Nitrogen markets have swung so far this year, partly due to uncertainty over Chinese urea export restrictions and India’s urea import requirements. Phosphate prices stayed firm in the first quarter due to robust demand in the Northern Hemisphere, supportive Indian purchases, Chinese export restrictions and production outages. Prices have softened in the second quarter, mostly because of lower seasonal demand, Nutrien said.

The company said it still expects retail adjusted earnings before interest, taxes, depreciation, and amortization to rise between $1.65 billion to $1.85 billion for the full year. That compares with $1.5 billion in 2023. 

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