Harvest Minerals Ltd (AIM:HMI, OTC:HMIFF) said it has reduced its sales target for the current year due to farmers delaying purchases of fertiliser in anticipation of the price falling further.
Sales volumes of Harvest’s KP Fértil in 2023 are now expected to be around 120,000 tonnes (t), against a previous target of 200,000t.
Harvest added it sold 27,000t in the first half of the year against a budget of 60,000t with a further 33,000t yet to be booked.
Brian McMaster, Harvest's chairman, said 2023 so far had proved to be a “complex year, with sales of KP Fértil impacted by farmers reducing spending on fertiliser in anticipation of further price drops”.
After a surge in prices following sanctions on Russia and Belarus, stocks have returned to normal levels in 2023 causing the price of fertilisers to drop.
Simultaneously, the price of soybean, the main crop planted in Brazil, also dropped, reaching levels below the expectations of the farmers and, in some cases, close to the cost of production.
Operational costs have not been impacted by the higher energy prices, Harvest said, as its solar plant supplies the vast majority of its power needs. The company is reducing the price of its fertiliser to follow the market and trigger the farmers to start buying, said the statement.
Harvest added that it made its maiden profit in the year to December 2022, posting US$472,000 before tax against a loss of US$4.1mln in the comparable period.
Revenues for the 12 months doubled to US$8.6mln (US$4.8mln).