All posts by mickeybarb@charter.net

Organic Fertilizer Bound for Sri Lanka Reported Infested with Pathogen

China, News, News Briefs, Specialty, Sri Lanka

Media reports out of Sri Lanka reported that samples of organic fertilizer ordered by the Sri Lankan government from China contain the harmful Erwinia pathogen.

Scientists in Sri Lanka told the Indo-Asian News Service that the pathogen affects root crops and could continue its impact even after harvesting.

Samples of the fertilizer were sent to Sri Lanka for testing. That is when the pathogen was discovered.

Earlier this year the Sri Lankan President issued an order that banned chemical fertilizers in favor of only organic fertilizers. The country signed a contract with China’s Qingdao Seawin Biotech Group Co. Ltd. to provide 99,000 mt of organic fertilizer at a cost of US$63 million.

The Chairman of the Sri Lankan National Agronomy Unity criticized the government move, saying none of the usual safety procedures were followed, including the lack of a safety certificate for the fertilizer. The organization had earlier warned that organic fertilizer, if imported from China, could cause more damage to Sri Lankan agriculture than traditional fertilizers.

Opposition parties also jumped on the discovery. The Marxist People’s Liberation Front said awarding China the contract was a mistake. The party leader said all that would happen was that Sri Lanka would receive China’s urban waste at the expense of Sri Lankan farmers.

Yara to Start Construction on Pilbara Green Ammonia Plant

Australia, Europe, Featured, Green Ammonia, Hydrogen, News

Yara International ASA is to begin construction on an A$70 million hydrogen-powered ammonia plant at its existing ammonia production site in the Pilbara in Western Australia in October, according to a report by the Australian Financial Review. Operations are targeted to start by 2023.

Yara and French energy and services major ENGIE propose to build a renewable hydrogen plant with 23 MW of solar and a 10-MW electrolyser at the site to support the production of renewable ammonia. According to the AFR report, ENGIE is on track to finalize supply contracts by the end of this year.

The first concrete phase of the project will produce up to 625 mt/y of renewable hydrogen and 3,700 mt/y of green ammonia.

The two companies in May secured a A$42.5 million (approximately US$30.9 million at current exchange rates) grant in Australian funding for the renewable hydrogen plant, under the ARENA Renewable Hydrogen Deployment Funding Round (GM May 7, p. 44).

Backhoe Causes NH3 Pipeline Leak

Ammonia, News, News Briefs, South Central

A backhoe caused a leak in an ammonia pipeline near Hampton, Ark., in Calhoun County on Thursday evening, Sept. 23, according to the Arkansas Democrat-Gazette, citing the Arkansas Division of Emergency Management. U.S. Highway 278 was briefly closed, and the leak was reported capped as of 10:30 pm. Local residents were either evacuated or ordered to shelter-in-place.

The Hampton School District declared a “snow day” on Friday, Sept. 24, as a result of the incident, according to the Magnolia Reporter.

NuStar Pipeline Operating Partnership LP, a division of NuStar Energy LP, San Antonio, operates the pipeline. It confirmed that the leak occurred at around 7:00 pm Thursday, Sept. 23, after the pipeline was impacted by a third-party excavator. NuStar said its personnel immediately implemented response procedures, which involved shutting down the pipeline and dispatching personnel to minimize the impact of the release.

NuStar said there were no reported injuries, but out of an abundance of caution, it evacuated residents who live within a 2.5-mile radius of the pipeline. It also said it contacted all appropriate emergency response and regulatory officials and is working closely with local authorities to secure and monitor the area.

Ammonia

Ammonia, Black Sea, California, China, Eastern Cornbelt, India, Market Watch, Middle East, Northwestern Europe, Pacific N.W., Southeast Asia, Tampa, U.S. Gulf, Western Canada, Western Cornbelt

U.S. Gulf/Tampa:

The market was still awaiting closure on Tampa prices for October. Sources expect the huge run up in natural gas prices in Europe, followed by ammonia plant shutdowns, to have an impact on Tampa, even though Mosaic will be needing less ammonia in the near term due to a 300,000 mt reduction in phosphate production in the wake of Hurricane Ida and a phosphoric acid problem at New Wales.

In the NOLA area, IPL’s Waggaman, La., plant lost a month’s worth of ammonia production. Likewise, CF’s Donaldsonville and Nutrien’s Geismar plants in Louisiana also had significant short-term outages.

Nutrien confirmed that it was bringing in 10,000 mt from Trinidad to the U.S. Gulf to cover its own commitments and lost Geismar production. The landed price was put at $645/mt CFR, which compares to Tampa’s $615/mt CFR for September. Yara is pulling from its U.S., Trinidad, and Australian plants to cover for its own idled European ammonia production.

In general, sell-side players were predicting at least a $20-$30/mt uptick in Tampa prices for October.

Eastern Cornbelt:

Ammonia prices were pegged at $690-$710/st FOB in the Eastern Cornbelt at midweek, up another $20-$30/st from last report, with the lower end of the range reported at Lima, Ohio, and the high in Indiana. The common terminal price in Illinois was quoted at the $705/st FOB level in late September.

Western Cornbelt:

Ammonia prices continued to firm in the Western Cornbelt. Sources quoted the market at $710-$730/st FOB in the region for prompt tons, up $35/st from the previous week, with the low reported in Iowa and the upper end FOB Hoag, Neb. Posted prices FOB Enid, Okla., also moved up, to $695/st for prompt shipment.

California:

The ammonia market in California remained at $710/st DEL for anhydrous and $187/st FOB for aqua.

Pacific Northwest:

The ammonia market in the Pacific Northwest was quoted at $695/st FOB regional terminals and $750-$760/st DEL, depending on location. Aqua prices edged up to $182/st FOB Washington terminals in mid-September.

Western Canada:

Ammonia pricing in Western Canada was quoted at C$1,050-$1,090/mt DEL in late September, depending on location, reflecting an increase of C$40-$60/mt since the beginning of the month.

Black Sea:

Plant closures continue in the area due to higher gas prices. Sources reported that Odessa Port Plant stopped, removing 1.1 million mt/y of production capacity from the market. October shipments will have to depend on what TOAZ can ship – about 170,000 mt – and what got sent to the port by Rossosh before they shut down for a planned October turnaround.

The material making its way to loading facilities all seems to be booked under long-term contracts, leaving nothing for the spot market. In the absence of any spot deals, industry watchers speculated that if any tons were available, they could easily be sold above $600/mt FOB.

Middle East:

Area ammonia supplies remain tight and limited to contract sales. Sources said the lack of tons is so severe that no one is even speculating what prices would be if some material was available.

Reports are circulating that a Taiwan buyer closed a deal at $580/mt CFR for an equivalent netback to the Arab Gulf of $510-$520/mt FOB. These prices are seen as out of line for both the Asian and Arab Gulf markets. One trader said the deal looks to have been done with the idea that Ma’aden would be back online and providing some surplus in an otherwise tight market. Unfortunately for buyers, Ma’aden is not yet producing for export, with little indication as to when that will happen.

Another deal to Deepak in India from Saudi Arabia via Trafigura was reported, but without pricing or quantity.

India:

The only cargoes that seem to be entering the country are based on long-term contracts or some other form of formula-based pricing. Sources said without a spot deal, the price remains around $670/mt CFR.

The tightness of the ammonia market seems to even have FACT stepping back from buying ammonia and focusing on sulfuric acid purchases for its plants.

Northwest Europe:

Continent-wide closures of ammonia plants are impacting availability and pricing. Even the announcement that the British government will help keep the CF Billingham plant open did not cheer up ammonia market watchers.

Borealis AG announced it was curtailing its European ammonia production. This latest victim of higher natural gas prices just added more incentive for North American ammonia to be imported. Sources said the situation in Europe, coupled with the tight availability in the Arab Gulf, should be a boon for North American ammonia producers looking to sell more product.

So far, no new price mark has become clear in the Northwest European market. Sources said everyone is still trying to figure out how long this situation will last and what remedies might be found to get around it.

At the same time, Baltic producers are reportedly thinking of starting off their October price talks at $650/mt FOB, a $60/mt jump from September.

Southeast Asia:

The reports of a deal into Taiwan at $580/mt CFR are viewed with skepticism, given the tightness of the global market and the steady demand in the area. One trader said if that price is to be believed, then the market dropped $100/mt overnight when every other location is going up.

Kaltim and PAU in Indonesia are getting ready for their scheduled maintenance shutdowns. Sources said they should be able to service their customers with reserved product, but no more than that.

China:

 Imports of ammonia in China for January through August were down 15.9 percent, according to Trade Data Monitor, to 600,000 mt from 713,000 mt during the same period last year.The top two suppliers were Indonesia at 245,000 mt and Saudi Arabia at 124,000 mt.

August 2021 imports were down 10 percent, to 77,000 mt from 86,000 mt in August 2020. The top suppliers were Indonesia at 46,000 mt, Ukraine at 15,000 mt, and Malaysia at 15,000 mt.

Urea

Brazil, California, China, Croatia, Eastern Cornbelt, India, Indonesia, Malaysia, Market Watch, Middle East, Pacific N.W., U.S. Gulf, Urea, Western Canada, Western Cornbelt

U.S. Gulf:

The nitrogen plant closures in Europe impacted the NOLA urea market, with prices quickly reacting. Sources also pointed to India finally pulling the trigger on its urea tender, but that factor was at least expected.

While early-week trades were reported as low as $529/st FOB, prices continually rose during the week. By late day Thursday, October was reported to have traded as high as $600/st FOB. At midweek, loaded barges were reported to have traded in the $582-$585/st FOB range, with first-half October at $575/st FOB. December was put at $560/st FOB. However, with each new day, sources said prices were on the rise.

NOLA has not seen $600/st FOB urea since 2012.

Eastern Cornbelt:

The urea market had reportedly jumped to $585-$630/st FOB in the region, depending on location and time of the week, up from the previous week’s $525-$570/st FOB. The low was confirmed at Cincinnati, Ohio, as the week began, but pricing ramped up to the top end of the range at Cincinnati, Louisville, Ky., and other river terminals by the end of the week.

In the Northeast, the Fairless Hills, Pa., urea market was quoted at $550/st FOB early in the week for September/October tons.

Western Cornbelt:

Urea pricing surged to $600-$620/st FOB in the Western Cornbelt, up a full $50/st from the prior week, with the low reported at Port Neal, Iowa, and the high at St. Louis, Mo.

Sources said the Catoosa, Okla., market also moved to a high of $620-$635/st FOB for new offers, up from $570-$575/st FOB the week before, while urea pricing at St. Paul, Minn., was reported in a broad $610-$650/st FOB range for the week.

California:

Urea pricing in California edged up to $600/st FOB Stockton for bulk tons, up from a recent low of $545-$550/st FOB, with reports of bagged urea moving at the $660/st FOB level at that location. No current rail-DEL offers were reported in the state.

Pacific Northwest:

Urea prices covered a broad $600-$650/st FOB range in the Pacific Northwest, depending on timing, with the upper end reported late in the week at Rivergate, Ore., and likely to move higher for the next round of business.

Western Canada:

The urea market had reportedly jumped to C$850-$870/mt FOB and C$870-$895/mt DEL in Western Canada, depending on location. Those levels reflect a roughly C$200/mt increase since the first of September.

India:

The much-anticipated RCF urea tender call came on Sept. 21. The tender will close on Oct. 1 with offers valid through Oct. 12 and shipping by Nov. 11.

Last year by the first week of October, Indian buyers had secured 6.8 million mt of urea. So far India has only imported 3.9 million mt through the tender process. To meet estimated demand, sources said the country will need to import at least 1.1 million mt each month through January 2022.

Sources said RCF had to keep pushing back the tender call because of fiscal reasons. The company was said to be looking for ways to protect its line of credit by getting guarantees of funds from the Department of Fertilizers (DoF). At the same time, the DoF was facing a pinch from the state treasury.

Indian media reported that the government is now planning to increase the budget for fertilizer subsidies. All told, they plan to move the fund up to US$16.19 billion from the earlier budgeted US$10.8 billion. The planned increase in urea subsidies alone is $1.21 billion, and will be needed.

Most international traders did not want to get nailed down on what prices might look like once the RCF tender closes. Some, however, did point to news reports that the paper market was at $518/mt CFR. From that basis and looking at talk of prices from urea producing regions, some ventured guesses that the offers could be $520-$540/mt CFR.

The buyer will face a tight market. Sources noted that even though there are reports that China has about 600,000 mt of urea sitting at port warehouses or available to be shipped to the ports, an edict issued by the National Development and Reform Commission has shut down talks between traders and producers to book product for October and November shipment.

At the same time, Arab Gulf supplies remain tight with little evidence that will change soon. The closure of urea plants in Ukraine due to high natural gas prices removed 100,000-200,000 mt that has been sent in the past from the mix. And, said sources, the latest price out of Indonesia could be too high for consideration into India.

While RCF works to import more urea, there are media reports of spot shortages of urea throughout the country. Some reports include stories of farmers resorting to buying urea smuggled in from Nepal at Rs350-400 for each 45-kg bag instead of the official maximum price of Rs262/45kg bag.

One international trader said he has begun to see some interest by farmers to buy DAP just for the nitrogen content. He noted that this move is more costly, but evidence of the measures some will take to get nitrogen for their crops.

China:

A document circulated by the National Development and Reform Commission and 13 other government agencies created an end to talks between international traders and Chinese sources of urea for export sales.

The commission called on the urea producers to ensure a plentiful supply of urea at stable prices for the domestic market. The commission’s action came as global prices kept rising and more producers were looking at moves to take advantage of those prices.

Sources reported that about 600,000 mt are available at various ports in China for export. Some of the tonnage is already committed to specific buyers, while other tonnage is waiting for a buyer. However, the commission’s demand that the domestic market be covered first led to a nervous withdrawal by international traders.

Sources said international traders are concerned that the commission could impose an export duty on tons contracted but not paid for, thus making the product too expensive for the final buyer. Another option available to the commission to enforce its policy is to impose a ban on exported urea.

Discussion of prices this week started in the upper-$470s/mt FOB. By the end of the week, on the heels of the RCF tender call and the release of the commission statement, sources said discussions were focusing on $495-$500/mt FOB. A dramatic run-up in prices, said one trader, could trigger action by the commission to limit export tons.

Even though there was a lot of discussion about what pricing should look like out of China, sources were clear that no new business was done this week to indicate a shift in pricing from the $420s-$430s/mt FOB.

Adding to the concern are reports that due to environmental concerns, production either has or is about to drop to under 60 percent of the rated capacity in the country.

Chinese urea exports for January through August of 2021 were up 39 percent, according to Trade Data Monitor, to 2.9 million mt from 2.1 million mt exported during the same period last year.The main buyers were India at 1.1 million mt, South Korea at 489,000 mt, and Mexico at 285,000 mt.

August 2021 exports of 264,000 mt showed a 31.7 increase from the August 2020 amount of 200,000 mt. India took 103,000 mt of the shipments, followed by South Korea at 57,000 mt, and Mexico at 48,000 mt.

Middle East:

The lack of spot sales from the Arab Gulf hindered price exploration. Sources said the cargoes that were moving out were all tied to contracts or formula-based deals.

Talk in the area is of prices in the upper-$470s/mt FOB. This represents a climb back to levels achieved after the last RCF tender in the $480s/mt FOB. Sources said talks dropped into the $440s/mt FOB and then slowly moved up as expectation rose for an Indian tender and as Egyptian prices began moving through the roof. Sources said the tightness of the market has made price discovery discussions difficult.

The paper market for the Arab Gulf is very bullish. September pricing is pegged at $525/mt FOB and October is at $530/mt FOB.

Last week, Egyptian producers predicted they would soon hit $600/mt FOB. They achieved that level when Helwan settled a deal for 6,000 mt of granular for November shipment. Prior to the Helwan deal, AlexFert sold 10,000 mt of granular at $595/mt FOB.

A deal earlier in the week for an October loading helped move the price up. Abu Qir reportedly sold 10,000 mt of granular at $555/mt FOB. By the time that deal was closed, Egyptian prices had moved up more than $100/mt since the end of August.

The paper market for Egypt did not keep up with the actual price. The September price was reported at $565/mt FOB and October at $572.50/mt FOB.

More production is being planned by various Egyptian producers, which sources said will allow the companies to expand beyond the European and eastern Africa markets they currently depend on.

Indonesia:

Kaltim closed a selling tender for 30,000-45,000 mt on Sept. 21 for October shipment. The winner was Liven with its bid of $502.50/mt FOB. An additional 10 companies also participated.

Bidding Company US$/mt FOB
Liven 502.20
Amber 501.50
Samsung 498.70
Eurochem 488.00
Oracle 485.00
Swiss Singapore 480.00
Gavilon 475.28
Aries 470.09
Ameropa 463.00
Indagro 460.00
Koch 440.00

The Koch offer was seen as a serious outlier by industry sources. Its price was $17/mt below the last done deal out of Indonesia. Sources said even the winning amount seemed low given the current state of the urea market. One trader said the $502/mt FOB winning price equates to about $540/mt CFR into India, which some estimate could be the high end of the offers to RCF.

Reportedly, Kaltim is willing to engage in further talks with any of the traders in the hopes of moving possibly another 100,000 mt for the same price.

Malaysia:

Petronas helped nail down higher prices in the region. Reportedly the state-owned company sold a cargo of granular urea at $530/mt FOB for November shipment as the week waned. An earlier deal was also reportedly done at $515/mt FOB, also for November.

Brazil:

Throughout the week buyers and sellers were trying to assess how the turmoil in the global urea market will affect Brazil. Sources began quoting prices early in the week at $540/mt CFR in Paranagua, but discussions moved the price to as high as $670/mt CFR throughout the week, although with no actual business done at that level.

By Friday morning, however, sources confirmed a sale at $640/mt CFR. Reportedly Ameropa handled the deal. Sources said they expect to see a continued rise in prices until the global urea market settles down.

Rondonopolis moved up to $660/mt FOB ex-warehouse. Sources said inland buyers were spooked by the Chinese commission demand that more attention be paid to the Chinese domestic market, the cutbacks in European urea production due to high natural gas prices, and the RCF tender call.

Reportedly, sellers are pushing for the upper $660s/mt FOB, but with no luck so far.

Croatia:

Petrokemija on Sept. 22 reported the shutdown of its ammonia and urea plants at Kutina due to a technical failure. The urea plant has an estimated capacity of around 500,000 mt/y. The producer said its other fertilizer plants are continuing to operate normally and supplies to customers have not been impacted.

UAN

California, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Gulf, UAN, Western Canada, Western Cornbelt

U.S. Gulf:

With the huge run-up in nitrogen prices, sources said there were no new trades of UAN barges at NOLA, with the market awaiting further word on what CF has in mind for the next round of pricing. Some players suggested the market may soon see as high as $400/st FOB. The last number reported was $340/st ($10.63/unit) FOB.

Eastern Cornbelt:

Sources continued to report no UAN-32 offers on the table in the Eastern Cornbelt in late September, with the last spot business reported before Hurricane Ida in the $355-$375/st ($11.09-$11.72/unit) FOB range, depending on location. New offers in the Northeast were reported at $400/st ($12.50/unit) FOB Fairless Hills for October shipment.

Western Cornbelt:

No current UAN-32 prices were confirmed in the Western Cornbelt, with the last prices for very limited offers reported in the $375-$395/st ($11.72-$12.34/unit) FOB range in late August.

California:

The UAN-32 market began the week at $390-$410/st ($12.19-$12.81/unit) FOB California terminals, up $15/st from last report, but sources said another increase pushed the Stockton market to $430-$450/st ($13.44-$14.06/unit) FOB as the week progressed.

Pacific Northwest:

The UAN-32 at midweek was quoted at $400-$405/st ($12.50-$12.66/unit) FOB Kennewick, Wash., up $20/st from last report. Rail-DEL offers in the Pacific Northwest were pegged at the $409/st ($12.78/unit) level at midweek.

Western Canada:

UAN-28 pricing was pegged at C$450-$485/mt (C$16.07-$17.32/unit) DEL for the last offers in Western Canada, up C$30-$50/mt from last report. Sources said they expect reference prices to firm to C$540/mt (C$19.29/unit) DEL in Saskatchewan for January shipment, but no official postings for forward tons were circulating as the week closed.

Ammonium Nitrate

Ammonium Nitrate, France, Market Watch, Western Cornbelt

Western Cornbelt:

LSB Industries Inc. on Sept. 23 announced a $50/st increase for ammonium nitrate, pushing reference prices to $440/st FOB Lamar, Mo.; $450/st FOB St. Joseph, Mo.; $455/st rail-DEL in the Midwest; $460/st rail-DEL in the Southeast; and $500/st DEL in the Western U.S.

France:

Yara reported late in the week that it is sold out of ammonium nitrate 33.5 (YaraBelaExtran33.5), just a couple of days after hiking its posted prices for November deliveries in France to €475/mt bulk CPT. The company has since withdrawn the offer.

DAP/MAP

Brazil, California, Central Florida, China, DAP/MAP, Eastern Cornbelt, India, Market Watch, Pacific N.W., Pakistan, Saudi Arabia, U.S. Exports, U.S. Gulf, Western Canada, Western Cornbelt

Central Florida:

The market quickly shook off rumors of an ongoing shutdown at Mosaic’s phosphate productions facility at New Wales, Fla., after a Mosaic source categorically denied the report’s validity.

“New Wales is running and will continue to run,” the contact said. “We provided information on an equipment failure at New Wales in our September 2nd announcement. The tonnage estimate impact provided … on Q3 stands.”

Driven by pervading market tightness, Central Florida DAP and MAP postings were seen moving higher for the week. Truck-loaded DAP values firmed to $655/st FOB from the week-ago $640/st FOB, while MAP trucks lifted to $685/st FOB from $670/st FOB in the prior report.

MAP trucks loading from North Florida were posted at $700/st FOB, a $30/st increase from the $670/st FOB week-ago posting.

U.S. Gulf:

Market players noted a flat start to the NOLA barge phosphate market, with prices moving up as the week wore on.

Sellers confirmed a handful of early-week DAP trades at a $635/st FOB low, with subsequent offers seen firming to $650/st FOB by Sept. 23. Trading was generally reported at a $675/st FOB high for the period, edging up from the prior $673/st FOB top.

Domestically produced MAP indications started the trading week at $665/st FOB before lifted to $680/st FOB on Sept. 23, sources said, while most import offers continued in the $700-$710/st FOB range. Trading was reported lifting to $730/st FOB on Sept. 23, sources said, while a $750/st FOB offer reportedly did not find a buyer on Sept. 23.

DAP barges loading from NOLA were quoted in the $635-$675/st FOB range for the full Sept. 17-23 trading week, up from $635-$673/st FOB the week before. With few trades confirmed, full-week MAP offers and indications firmed to $665-$730/st FOB, up from the week-ago $665-$710/st FOB.

U.S. Exports:

No new business was heard out of the Gulf phosphate export market for the week. As a result, pricing continued at a last-reported $660/mt FOB for DAP and $685/mt FOB for MAP.

Eastern Cornbelt:

DAP prices surged to $705-$725/st FOB in the Eastern Cornbelt, up roughly $15-$35/st from the previous week, with the low reported at Cincinnati at the beginning of the week. The MAP market firmed to $735-$775/st FOB in the region, with the low again confirmed at Cincinnati early in the week.

In the Southeast, Nutrien reported that it raised MAP pricing at Aurora, N.C., to $700/st FOB during the week, up $30/st from the prior week.

Western Cornbelt:

DAP pricing remained in a broad range at $685-$725/st FOB in the Western Cornbelt, with the St. Louis market pegged at $700-$710/st FOB. MAP was quoted at $725-$770/st FOB in the region, with the same range reported at Catoosa/Inola and St. Paul.

California:

MAP pricing in California was up another $20-$40/st from last report, to $785-$805/st rail-DEL or FOB French Camp, Helm, Richvale, Dixon, and El Centro, with the higher numbers reported later in the week.

Pacific Northwest:

MAP prices early in the week were reported at $775/st FOB or DEL in Washington, Oregon and Nevada, and $765/st DEL in Idaho, Utah and Montana, up $25/st from early September. As the week progressed, however, prices moved up an additional $20/st, to $785-$795/st DEL in the region.

Western Canada:

MAP prices in mid-September firmed to C$1,085-$1,100/mt DEL in Western Canada, reflecting a C$70/mt increase from last report. Warehouse pricing in the region reportedly jumped to C$1,040-$1,060/mt FOB, up C$40/mt from the first of the month.

Saudi Arabia:

The Saudi Arabia phosphates market was noted strengthening to the $635-$650/mt FOB range, up from $630-$645/mt FOB at last report.

India:

Sources reported offers for DAP in the upper-$670s/mt CFR, while local media quoted prices at $672/mt CFR. The rising price is continuing to cause concern about the need for additional subsidies.

The government already added US$2 billion to the subsidy budget in June to help ease pressure on farmers facing higher DAP prices. Now, according to local media reports, the government is ready to add another US$1.13 billion to help cover DAP subsidies.

The extra money will be needed, said international traders. Even as levels in the $670s/mt CFR represent unusually high prices, sources expect the price to keep rising. The current quoted price in China is in the $650s/mt FOB, which translates closer to about $690/mt CFR into India.

Sources said some farmers are looking at DAP purchases to make up for limited supplies of urea in their regions. Reportedly the farmers are desperate for nitrogen and are willing to use DAP or other fertilizers with nitrogen to get it.

Pakistan:

Sources reported DAP deals with Chinese producers into Pakistan at $680/mt CFR. This price matches with the deals reportedly taking place in India in the $670s/mt CFR.

China:

Sources said DAP producers are now quoting $650/mt FOB for their product. If achieved, sources said the Indian price could be pushed into the $690s/mt CFR.Based on the latest deals reported in India and Pakistan, the netback to China is around $630/mt FOB.

Sources expect to see cutbacks in DAP and MAP availability. They point to aggressive environmental inspectors who are fining plants that are out of compliance with the stringent environmental laws. Some of the penalties will require plants to shut down until the violations are corrected. At the same time, the phosphate producers face the same edict that could limit urea exports.

The National Development and Reform Commission told producers to first look to the domestic market before considering exports. Sources said the commission could impose export duties or ban exports if, in its view, there is not enough DAP or MAP available for the local market at a reasonable price.

The fear of shutdowns related to environmental inspections and limited export possibilities has led some plants to cut back on ordering inputs such as sulfur and ammonia. One trader said the rising cost of these inputs and the possibility that they may not be needed is making some plant operators think twice before ordering the imports.

Chinese DAP exports for January through August were reported at 3.6 million mt by Trade Data Monitor. This represents a 31.8 percent increase from the 4.75 million mt exported during the same period last year. The main buyers so far this year were all in Asia.

Receiving Country Chinese DAP Exports (‘000 mt)
Jan-Aug 2020 Jan-Aug 2021
India 1,300 1,200
Pakistan 389 668
Thailand 359 534
Bangladesh 70 397

August 2021 DAP exports of 550,000 mt showed a 31.5 percent decrease from the August 2020 amount of 802,000 mt. Bangladesh and Pakistan were the top buyers.

Chinese MAP exports for January through August were reported at 3.1 million mt, up 83 percent from the 1.7 million mt exported during the same period last year. Latin American buyers dominated the exports this year at 2.3 million mt, a 252 percent increase from the 921,000 mt exported to that region during the same period in 2020. Sales to Latin America accounted for 74 percent of China’s MAP exports in the first eight months of the year.

August 2021 MAP exports of 573,000 mt showed a 148 percent decrease from the August 2020 amount of 231,000 mt. Brazil, Argentina, and Chile were the top three buyers.

Brazil:

Paranagua reported MAP prices steady at $710-$725, reflecting just a minor upward adjustment at the lower end of the range. Sources said the main focus is now transporting the product rather than securing more tons.

The Rondonopolis price moved to a flat $850/mt FOB ex-warehouse. The barter rate for 1 mt of MAP held steady at 100 bags of corn at Sorriso.