* Q2 results fall short of consensus
* 2017 EBIT I guidance in-line, revenue aim misses
* K+S scraps 2020 profit target, citing low prices
* Miner says will issue new targets this autumn
* Shares drop 3.6 pct in early trade (Recasts, adds analyst comment, revenue forecast, background)
By Maria Sheahan
FRANKFURT, Aug 15 (Reuters) - Germany's K+S SDFGn.DE reported quarterly results that missed forecasts on Tuesday and scrapped its 2020 profit target, the latest potash miner to struggle with an oversupplied market.
Second-quarter operating profit, adjusted for currency hedging effects (EBIT I), nearly doubled to 29 million euros but fell short of a Reuters poll consensus for 31.3 million. Revenue of 742 million was also below estimates. prices in Europe and Latin America have steadied but at low levels over recent months, while North American markets have seen signs of recovery as some older mines were put out of service.
K+S's new Bethune mine in Canada, where production is being ramped up, and two mining projects by EuroChem, owned by Russian tycoon Andrei Melnichenko, are adding to a global capacity surplus that has pushed potash prices to decade-lows.
"As the new potash capacities of K+S, EuroChem, Mosaic and Turkmenkhimlya are ramping up and should lead to significant oversupply, we expect the potash environment to worsen quickly," wrote Baader Helvea, an analyst Markus Mayer who recommends selling shares in K+S.
Shares in K+S fell 3.6 percent to a four-month low at 21.04 euros by 0723 GMT, making them the biggest decliners on the German MDAX index of mid-sized companies .MDAXI .
K+S said it expected its 2017 EBIT I to rise to between 260 and 360 million euros from 229 million in 2016, in line with consensus. But its revenue forecast for 3.6 billion to 3.8 billion euros fell short of consensus for 3.9 billion.
K+S said it was now unlikely to reach its 2020 target for earnings before interest, tax, depreciation and amortisation (EBITDA) of around 1.6 billion euros as that goal was based on higher potassium chloride prices in Brazil.
"I'm not saying it's completely impossible, but no longer realistic. We are going to work hard to close the gap as much as possible," Chief Executive Burkhard Lohr said in a video posted on K+S's website.
Analysts had already seen the 2020 target as unrealistic, with consensus for 2020 EBITDA at only 1.1 billion euros, according to Thomson Reuters data.
K+S said it would unveil its new strategy this autumn and would issue new medium- and long-term targets at that time.
($1 = 0.8494 euros)