DAP Fertiliser Prices Keep Falling

Insight Focus

• India now bidding well below USD 600 CFR for new DAP arrivals.
• Emerging seasonal demand appears to have triggered a price increase of both prilled and granular urea in South East Asia.
• The global potash market is bearish still awaiting price guidance from the India contract settlement.

The international urea market is still oversupplied with products with little demand from major markets except for an emerging regional and seasonal demand in South East Asia which this week saw a 30,000 MT granular urea cargo sold at USD 342 MT FOB Bontang, Indonesia. This price is around USD 40 PMT above the prevailing spot FOB price in the Middle East. However, it remains to be seen if this price is sustainable for the coming weeks. If spot demand should emerge in either or both of Australia and Thailand and with the May-July main season coming up in the Philippines, and with the absence of major Chinese supplies – maybe there is a good chance that this price recovery could hold. Middle East netback for sales to NOLA/US is said to be around the USD 290 FOB mark on the back on NOLA barges priced at around the USD 310-320 ST FOB.

Nigeria has now established itself as a major exporter of granular urea with an export volume of 2.8 million MT in 2022 up from 1.3 million the year before. Major markets are Brazil and the US. GPIC of Bahrain exported a record 657,000 MT of urea in 2022 with India, Australia and Thailand being the largest beneficiaries. The Philippine import of urea in 2022 fell to 617 KT from 792 KT the year before.

Processed phosphate prices keep on showing weakness with India now reported to be bidding DAP at USD 575 CFR down from last week’s reported sale of around USD 615 CFR. India is reported to have lined up 1.9 million MT of DAP for arrival by April with an opening stock on May 1st approaching 4 million MT up from 2.7 million Y/Y. China is starting to show muscle in the export market and for the two months of 2023 DAP exports were up 55% Y/Y reaching 720 KT. Total processed phosphate sales reached 1.1 million MT up a staggering 93% Y/Y.

Brazilian lineups of DAP/MAP for Q1/23 are said to be as high as 1.4 million MT up 90% Y/Y. MAP prices are however showing declines dropping around USD 25 PMT over the past few weeks now reported at USD 630-635 CFR.

The global potash market is bearish with ample supplies including those from the sanctioned Belarus chasing few buyers now holding back buying in fear of continued reduced prices. The continued absence of any contract settlement in India is also contributing to prices falling. South East Asia standard grade MOP is reported in the range of USD 410-440 CFR with granular grade MOP reported in the range of USD 500-550 PMT CFR down another USD 35 PMT this week. In comparison the Brazilian granular MOP range is between USD 450-470 CFR thus the SE Asia price still has further reductions coming.

The ammonia market bar a resurgence of exports of ammonia to China from Indonesia is dormant. The market is waiting for guidance from the April MOSAIC/Yara settlement which is expected to be at least USD 100 PMT less than the March price of USD 590 CFR which again was USD 200 PMT down from the February settlement.