AMMONIA

U.S. Gulf/Tampa: These ammonia markets are reported as quiet, or perhaps a better word would be stagnant – very little demand and very little movement. For the most part, sources say January Tampa prices appear to have rolled over at the $125/mt mark.

Less demand was evident, according to U.S. DOC statistics for November, which saw a 33 percent drop in ammonia imports – to 511,834 st from the year-ago 761,777 st. July-November imports were off 12 percent, to 3.16 million st from 3.6 million st.

Natural Gas: NYMEX Henry Hub prices for the current month dropped below $5.00/mmBtu last week for the first time since 2006. Sources noted how unusual this was in light of the cold blast of arctic weather hitting much of the nation. However, sources said gas inventories were believed to be too high to keep the price up. In addition, cuts in industrial demand could not be helping the gas market.

Eastern Cornbelt: The anhydrous ammonia market was quoted at $485-$573/st FOB for cash tons, with the low in Illinois and the upper end on a spot basis in Ohio. Prepay ammonia was reportedly on the table for $550/st FOB in Illinois, and around the $570/st FOB mark in Indiana and Ohio.

Western Cornbelt: Anhydrous ammonia remained at $450-$500/st FOB terminals for cash market tons, with delivered ammonia in Missouri reported in the low- to mid-$400/st range from southern production points. One source said several suppliers cut off spring prepay programs at mid-month.

Southern Plains: Ammonia pricing was up from last report, with most sources tagging the market at $325-$360/st FOB regional terminals to the dealer for prompt tons. The low was confirmed out of regional production points, while the upper end was reported FOB pipeline terminals. One source said spring prepay ammonia was still on the table from one regional supplier at the $370/st FOB mark.

Agrium’s Borger, Texas, plant was down last week due to market conditions. The company said the facility will restart when ammonia demand picks up. Production capacity at the facility is 490,000 mt/y of ammonia and 99,000 mt/y of urea.

South Central: The anhydrous ammonia market was tagged at $485-$490/st FOB regional terminals to the dealer for prepay tons, with cash market ammonia reported as low as $400/st FOB the Memphis, Tenn., market.

California: On Jan. 13, Agrium reposted anhydrous ammonia at $575/st truck-DEL in central California and $580/st truck-DEL in northern California.

Black Sea: Russian gas monopoly giant Gazprom issued a force majeure last week on all natural gas deliveries into Ukraine and the rest of Europe. At the same time, reports are circulating that major ammonia producers in the area have also begun issuing similar notices.

Asian sources are expecting to see prices head up as the stockpiles of ammonia in the area are shipped out with no replacement in the pipelines.

Finding a solid price for what is being shipped is still difficult.

At the same time, the important U.S. buyers are staying away from the Black Sea. The Tampa price would have to climb an additional $150/mt before Yuzhnyy material can once again be considered into the U.S. port. And with plentiful and inexpensive ammonia available from Trinidad and demand weak, sources say it will be a while before Black Sea tons are once again shipped to the U.S.

Some sources still peg the market closer to $150/mt FOB, while others, including many in Asia, say the price remains hovering at $180-$200/mt FOB.

Middle East: Touting themselves as safe and secure suppliers of ammonia, producers in this area are pushing for higher prices. Sources report that the Middle East producers are pointing to the continuing natural gas dispute between Russia and Ukraine.

Producers were quick out of the box, with offers beginning at $160/mt FOB.

The last bit of business people could point to was a deal by Sabic to an Indian buyer at $155/mt CFR, for an estimated netback of $125-$135/mt FOB.

With Black Sea material availability up in the air and with the traditional buying period beginning, sources say $160/mt FOB can easily be achieved soon. For now, however, prices remain just below that level.

Western Europe: Sources say most of the European producers who took down their plants for routine maintenance are keeping them down beyond the original start-up dates. Those who have not shut down may end up doing so soon.

Low prices and disruption in the flow of natural gas are combining to force producers to sit out the winter with little or no production.

Demand has been dramatically off for the past couple of months, leading to the collapse of prices in the area.

Sources report a cargo from Trinidad was sold into NW Europe at $155/mt CFR. This compares to what industry observers say is $250/mt FOB for material from Yuzhnyy. Even if a better rate on freight from the Black Sea could be found, say sources, the best price from Yuzhnyy could only be $200/mt CFR.

What is clear is that for the market to recover, buyers need to step back in and Russia and Ukraine need to settle their differences over natural gas transmission and pricing. The global economic collapse is affecting industrial buyers of ammonia in such a way that they may not re-enter the market any time soon.

UREA

U.S. Gulf: Granular urea barge prices continued to shoot up last week, with most saying they had hit as high as $305/st FOB, if not higher, by late in the week. The big question was where they began. Sources said most of the business occurred below the $300/st FOB mark. For all of their activity, by late in the week prices appeared to have stabilized at the top of the range.

Most credited the surge to bona fide demand in wheat country as players worked hard to replenish inventories in Inola and Catoosa. Sources said barges were slow getting there in time. Adding to the wheat country intensity was the continued outage of Koch’s Enid, Okla., plant. Not only was the plant still down, but sources reported that Koch had to enter the market to cover for tons that had been booked out of the plant, which has been in the process of being upgraded.

Sources also continued to point to the Russian and Ukrainian gas dispute. In the meantime, problems with Indian gas appear to have been resolved.

Market bears said it was time for the market to calm down. They cited word that new stray imports may be on the way into the U.S. from Egypt, Libya, and even Australia. In addition, Agrium has a Profertil cargo on the water; however, that one is due for California, not NOLA. Bears also pointed to weaker corn numbers as causing some concern, and estimated that there are still hundreds of urea barges in the NOLA area. However, bulls said there are not as many as a few weeks ago.

Bulls also had DOC import statistics on their side. November U.S. imports were off 10 percent, to 541,326 st from the year-ago 600,554 st. July-November imports are off 8 percent, to 2.4 million from 2.6 million.

Eastern Cornbelt: Urea prices were up on the strength of higher NOLA barge values. Sources tagged the granular urea market at $340-$350/st FOB in the Cincinnati area and out of several river locations in Illinois, reflecting a jump of $55-$70/st from the previous week. Sources reported some calls from interested buyers coming in at both the retail and wholesale levels last week, with some spot tons moving here and there to top off inventories.

Western Cornbelt: Sources reported firming urea prices. Granular urea was pegged at $330-$350/st FOB to the dealer last week, with most touting the upper end of that range as the week progressed. One supplier was referencing forward contract urea FOB Pine Bend, Minn., at the $380/st mark for February.

Southern Plains: Urea pricing was up, and sources said the continued outage at Enid, Okla., was pushing demand to the Catoosa/Inola, Okla., market, where some supply pressure was noted last week. Sources tagged the Catoosa/Inola market at $340-$355/st FOB, up from the prior week’s $270-$300/st FOB range. The Houston urea market was pegged at $330-$340/st FOB at midweek, up from $250-$270/st FOB one week earlier.

South Central: Sources tagged the granular urea market at $325-$350/st FOB regional terminals to the dealer for prompt tons, up $60-$80/st from last report, with the higher number more prevalent as the week advanced.

Southeast: Sources reported firming urea prices. Granular urea was pegged at $325-$350/st FOB port terminals for prompt tons, which was an increase of $50-$70/st from last report. The Baltimore, Md., and Philadelphia, Pa., markets had reportedly firmed to the $350/st FOB level last week.

Pakistan: As last week came to a close, the industry was watching Pakistan and India as much as the natural gas dustup between Russian and Ukraine.

In Pakistan, TCP was slated to close a tender for 250,000 mt Saturday morning, local time. The initial view was that Chinese and Black Sea material would dominate the tender offers. As the week closed, however, sources said the only reliable source would be the Middle East.

The declaration of force majeure from Ukrainian producers and Gazprom, coupled with clear signals from China that the 110 percent export duty would take effect Feb. 1, killed all hopes of large offers at low prices.

One trader said the same major players will most likely participate in the tender, but with fewer tons to offer. One observer noted that traders and Middle East producers will make smaller offers in an effort to get some business and remain in the good graces of TCP.

India: It seems the Department of Fertilizer was not ready to name the company to import the next load of urea, despite rumors that STC would call a tender by Jan. 14. DOF met Jan. 15 to review not only the country’s urea needs – said to still be anywhere between 500,000 mt and 1 million mt – but also the budget.

Ever-declining prices in the past few months led the DOF and treasury ministry to force buying companies to scrap tender awards in favor of new deals at lower prices. Traders and producers were not happy with that action.

In the end, the DOF was expected to let a buyer know by late Friday, Jan. 16 how many tons it would be allowed to import. Sources say the delay, caused by the government overlords of the fertilizer industry, may mean that prices offered in the next tender will be significantly higher than they had hoped for.

A tender will be called quickly on the heels of the closing of the DOF meeting.

Indian oil workers ended their three-day strike Jan. 9. However, 17 major fertilizer plants were down during the period, with another eight reportedly on the verge of closing down. Sources said this cost producers considerable amounts of money and production at a time when demand is peaking.

Black Sea: Gazprom issued a force majeure on its natural gas shipments through and into Ukraine and the rest of Europe. Negotiations between Russia and Ukraine were up and down all last week. At first a deal was reached and the gas could flow. Then an agreement on monitors along the Ukrainian portion of the pipeline did not satisfy the Russians. Then an addition to the agreement by the Ukrainians was not to the liking of Gazprom. As last week rolled to an end, the gas was still not flowing.

Just as the dispute over the gas started, ammonia and urea producers in Ukraine and central Europe began shutting down.

About the same time Gazprom issued its force majeure, so did fertilizer manufacturers throughout the region.

The notices are required by the producers to avoid penalties under existing contracts. Sources say the real impact of the declarations will not be felt until two months from now. At that point, if the gas situation is not straightened out and if urea production does not resume, then the force majeure provisions of the contracts take effect.

Sources say ships are still loading urea that was purchased. The stockpiles are sufficient, said one trader, to cover the orders made under tender awards.

No new business is being reported, because the traders holding positions in Yuzhnyy and other Black Sea facilities are trying to keep their cargoes from going someplace else.

As the week closed, sources reported one deal to a trader at $300/mt FOB. Others in the industry, however, say the deal was more likely in the mid-$290s/mt FOB. No matter the exact price, observers note that there is agreement that the price has moved up about $75/mt in just one week.

Asian traders said a price increase was inevitable. Demand is getting stronger not only from Asia, but also Latin America. Some European demand is also expected in the next few days.

Adding the possibility that some, if not all, plants may have to shut down because of lack of natural gas supplies, the price had to rise.

Adding to the upward pressure on prices are reports that China will not ease its export duties, nor allow for flexibility in what tons are eligible for the 10 percent duty and what tons will have to be charged 110 percent.

As the week ended, sources say a price range of $280-$300/mt FOB is perhaps the most honest view of the market.

Middle East: Between China not extending a lower export duty and the Black Sea suppliers all tied up because of reduced or no natural gas inputs, the Middle East producers are now seen as safe and reliable. And expensive. Egypt is now asking $300/mt FOB for its granular urea. Arab Gulf suppliers are also pushing $260/mt FOB as the minimum they will accept for prills, and $270/mt FOB for granular.

Sources say $260-$270/mt FOB for prills and $270-$280/mt FOB for granular now appears to be the level where talks are taking place. These prices compare to $240-$245/mt FOB for both under the last set of tenders from Pakistan and India.

Sources say that prices were expected to go up as the spring demand buying begins. Few are looking at prices seen last year.

At this time last year, Middle East prills were more than $400/mt FOB and kept going to more than $800/mt FOB until late September, when the prices dropped like a rock.

South Korea: Namhae closed out a tender for February delivery of 20,000 mt of granular urea and 5,000 mt of prilled. It is also finishing talks with potential suppliers for 75-100,000 mt of granular and 25,000 mt of prills spread out over the year.

For Asian traders, seeing the South Koreans back in the urea market was like opening a window on a pleasant spring day.

Even though demand in Asia has been steady, buyers kept their counsel as lower prices appeared each day.

Eventually someone would have to step up, because the application season does not wait for optimum pricing.

One Asian trader said the Korean entry into the market was at the right time, given the problems in the Black Sea and Beijing’s refusal to extend the lower export duty.

Reportedly, the cargoes slated for February delivery will come from China. They are being loaded before the end of this month in order to qualify for the lower duty. Where the other cargoes for the rest of the year will come from is still up in the air.

Sources say the Korean buyers have adjusted their buying ideas. Initially, they rejected offers at $270/mt CFR for prills. Now they are bidding in the high $280s/mt CFR for the same product.

How much of the material currently under discussion will be used for domestic farmers and how much will end up being blended for shipment to North Korea is still up in the air.

Officially, neither government is ready to call for a resumption of exports to North Korea.

The Seoul government told North Korea it would not send any more fertilizer or other agricultural support until the North returns to the six-party talks on de-nuclearization.

For its part, Pyongyang says it had earlier told the South Korean government it did not want any further assistance because of the election of a conservative leadership.

Bangladesh: Reports are mixed, but it now appears that Ameropa is loading vessels in China after winning awards from the BCIC tender that closed late November 2008.

Sources say awards for the December tender have not yet been made. Initial reports had Ameropa loading tons to satisfy both tenders. Asian traders familiar with the BCIC tenders said only the November tons have been awarded as of late Thursday.

China: As the end of the month approaches, guessing what will happen with the export duties has settled on four scenarios: no changes are made; beginning Feb. 1 the export duty will jump to 110 percent; the extra duty will be increased by 35 points instead of 100, for a duty of 45 percent; or the 10 percent duty will be extended until March 1.

Sources say the odds-on favorite is that no changes are announced and China goes ahead with its plans to increase the export duty to 110 percent.

In addition to staying with the plan announced last year, sources say the authorities will crack down on the timetables used for figuring out the tax rate.

Beijing reportedly has made it clear that only cargo being loaded in ships nominated, in port, and being loaded before Jan. 31 are legible for the 10 percent duty.

The move to reinforce this part of the regulations is in reaction to past years, when local customs officials allowed cargo reportedly purchased on the last day of the low-duty period to get by at the reduced rate. In many cases the urea had not even left the plant and was not loaded onto a vessel until weeks – sometimes months – after the deadline for higher duties went into effect.

Indonesia: The government issued PIM permits to export 500,000 mt of urea this year. Just what plant will supply how many tons and when is still up in the air.

The government is studying another plan to put all urea exports under the umbrella of PIM.

Past efforts failed, said one source, because not all of the state-owned urea producers were included in the deal. This time, they say, all will be forced to sell their product through PIM.

The producers will coordinate when and where they will offer export tons, and PIM will handle all the paperwork.

For now, however, even if the plan were in place, sources say the government is more anxious to ensure full warehouses for the domestic market. So no exports will be happening soon.

NITROGEN SOLUTIONS

U.S. Gulf: UAN barges were reported to be moving up last week, finally starting to follow the surge in urea. Prices were reported as $200/st FOB plus and moving up.

U.S. UAN imports in November were off 42 percent, to 184,988 st from the year-ago 321,261 st. Sources say most UAN exporters to the U.S. are offline due to the lack of demand.

Eastern Cornbelt: UAN pricing covered a wide range. Although few had any room for prompt tons, sources said UAN-28 could be had for as low as $225/st ($8.03/unit) FOB spot river locations for immediate ship. At the upper end of the range, sources quoted prepay solutions tons at $8.60-$8.95/unit FOB in the region, with one source reporting UAN-28 prepay at the $245/st ($8.75/unit) FOB mark in his trade area.

Western Cornbelt: The UAN-32 market was generally quoted at $260-$280/st ($8.13-$8.75/unit) FOB regional terminals, with reference prices as high as $320/st ($10.00/unit) FOB.

Southern Plains: The UAN-32 market remained at $230-$260/st ($7.18-$8.13/unit) FOB regional terminals, with the lower numbers out of production points.

South Central: UAN-32 was quoted at $275-$300/st ($8.59-$9.38) FOB regional terminals from prompt tons to the dealer, reflecting an increase from last report although there was little new business to test the market. In central and eastern Texas, UAN-32 was quoted in the $280-$290/st range ($8.75-$9.06/unit) FOB.

Southeast:The UAN-30 market was quoted at $255-$265/st ($8.50-$8.83/unit) FOB terminals on the East Coast, with the upper end reported as the week advanced. One source at midweek said most terminals were at the $260/st ($8.67/unit) FOB level to the dealer.

AMMONIUM NITRATE

U.S. Gulf: Price ideas for ammonium nitrate barges have fallen, according to sources, but due to the surge in the urea, may have quickly bounced. While some said prices had fallen as low as $200-$210/st FOB, others, citing the urea uptick, were reported to now be quoting $250/st FOB.

AN imports in November were off 60 percent, to 47,988 st from the year-ago 120,044 st. July-November was off 34 percent, to 283,224 st from 431,169 st.

Western Cornbelt: The ammonium nitrate market remained at $250-$300/st FOB in the region, but some sources speculated that the lower-priced tonnage would be short-lived as urea prices strengthen.

Southern Plains:Ammonium nitrate was pegged at $270-$300/st FOB Catoosa.

South Central: The ammonium nitrate market had reportedly dropped to $275/st FOB terminals in the region.

Southeast: Ammonium nitrate was down from last report, but sources reported a wide variance in pricing depending on location. In the Carolinas, rail-delivered nitrate was pegged as low as $340/st, while Tampa ammonium nitrate pricing remained as high as $480-$495/st FOB for truck market tons. One Florida source said he expects movement on citrus crops to start in the near term.

AMMONIUM SULFATE

Eastern Cornbelt: Granular ammonium sulfate was tagged at $150-$155/st FOB or rail-DEL in the region.

Western Cornbelt: Granular ammonium sulfate remained at $150/st FOB or DEL in the region based on posted levels from Honeywell.

Southern Plains: The granular ammonium sulfate market was down from last report at $200-$250/st FOB Texas shipping points, with the low FOB Freeport. Postings FOB Plainview dropped on Jan. 5 to $250/st for granular, $240/st for coarse, and $230/st for standard grade.

Also effective Jan. 5, American Plant Food Corporation’s granular ammonium sulfate postings in Texas dropped to $200/st FOB Freeport, $215/st FOB Galena Park, $230/st FOB Fort Worth, and $250/st FOB Littlefield. APF’s coarse grade sulfate postings were $10/st lower than granular at those locations, and the company’s standard grade postings moved on Jan. 5 to $180/st FOB Freeport and $230/st FOB Littlefield. APF’s Jan. 5 N-Pac Compacted posting FOB Galena Park was $220/st.

South Central: The ammonium sulfate market was pegged at $200-$225/st FOB in most of the region, with the low reported FOB Memphis.

Southeast: Ammonium sulfate pricing was down from last report following a round of new postings in early January. Granular ammonium sulfate was reported at $140-$150/st FOB, with the low reflecting DSM’s posted price FOB Augusta, Ga. Other list prices from DSM included granular at $179/st DEL in Florida, with standard grade sulfate at $120/st FOB Augusta and $158/st DEL in Florida.

U.S. Imports: November imports were off 10 percent, to 28,492 st from the year-ago 31,785 st. July-November was off 11 percent, to 136,884 st from 153,168 st.

PHOSPHATES

Central Florida: The Central Florida phosphate market appeared to be settling into a relatively steady range last week, as the bottom moved up and the top moved down. Still, with a $60/st FOB spread, it was far wider than either the NOLA DAP barge or export ranges.

Phosphate producers – at least Mosaic and CF – were using $310/st FOB late last week, while traders were getting considerably better prices, which looks like a more normal market. However, while trading was running at a blazing pace compared to a month earlier, it was slower than the previous week. Still, railcars were moving out of Florida.

Nevertheless, The Fertilizer Institute’s December report showed inventories remained extremely high in December, while production fell from around 50 percent of normal to just over 30 percent. That low level of production will continue until the market kicks into a higher gear and inventories begin to take a dive. Mosaic’s production continued to be sharply curtailed last week, while PotashCorp’s White Springs plants and its Aurora facility in North Carolina were all idle and its other operations were scaled back. The cutback in phosphate production throughout the industry will continue until at least sometime in February and possibly longer, unless a major surge in sales occurs. Offshore business typically picks up in the second quarter, and inventories could drop sharply and prices rise if domestic sales start rising around the same time. The potential for transportation logjams if everything comes to life at the same time adds to problems later this semester.

In North Carolina, state regulators approved PotashCorp’s wetlands proposal for its mining plan, which will clear the way for its permit. It was the largest wetlands destruction plan ever approved in the state, and the company will be required to restore the wetlands once mining has been completed.

For the next week or two prices should stabilize, and that would be a good sign the market is returning to health after a long illness.

The Central Florida DAP price range changed last week from $300-$390/st FOB the previous week to $310-$370/st FOB. CF was said to be asking $310/st FOB. PCS Sales was still holding at $1,070/st FOB, and Mosaic had no posted price for Central Florida, but was said to be selling for as low as $310/st FOB. New prices were possible late last week or early this week. The most recent price from Agrifos was $350/st FOB for trucks $340/st FOB for rail shipments.

U.S. Gulf: The USDA issued its corn report, and the news was not good. The immediate effect was to lower the price of corn futures, and that caused a reaction in the phosphate market. Activity slowed, and quickly. However, as the price of corn began to improve last week, activity followed in the phosphate markets, and prices appeared to be stabilizing or rising slightly by the end of the week.

Both traders and producers said activity was down, and one large operator said his sales were only about half the rate and amounts of the previous couple of weeks.

The USDA said about 86 million acres of corn will be planted this year, which was only about a million less than last year, but the amount of grain in storage will likely increase and prices may drop. One of the contributing factors was the falling price of oil, which was below $40/barrel last week. As the price of oil declines, interest in ethanol diminishes along with economic benefits of blending.

A rumor held Mosaic was restarting its ammonia plant at Faustina in preparation for restarting phosphate production, but the company said that was untrue. Restarting either would make no sense at this time. The price of ammonia was only $125/mt at Tampa, and Mosaic certainly does not need any additional supplies of phosphate now. The market was too weak and storage was in short supply. Sources said that if additional phosphate supplies are needed for the river markets, rail or cross-Gulf shipments were much more likely.

For the past couple of years pastures have been going without fertilizers in general, but recently nitrogens have been applied and phosphate was being added to the mix. However, potash was still far too expensive to be applied. Wheat, too, was making a comeback in terms of nitrogen and phosphate applications.

Early last week, shortly after the USDA report was issued, NOLA DAP barges were sold as low as $294-$295/st FOB, but moved up by mid-week to $305/st FOB. By the end of the week, a high price of $320/st FOB was achieved. As a result, the NOLA DAP barge price range last week increased to $294-$320/st FOB, an improvement from the previous week’s $290-$312/st FOB. Watch for prices to stabilize a little over $300/st FOB this week.

Eastern Cornbelt: The DAP market was pegged at $350-$375/st river terminals, with the upper end to the dealer FOB Cincinnati. Out of inland warehouses, the DAP market was pegged as high as $390-$405/st FOB last week. MAP was $15-$25/st higher than DAP, depending on supplier and location.

10-34-0 remained in a broad range at $650-$850/st FOB, with the low reported in Illinois and the upper end quoted by Ohio and Indiana sources FOB local terminals.

Western Cornbelt: DAP was pegged at $350-$375/st FOB regional warehouses to the dealer, with MAP $15-$20/st higher. One Missouri source pegged the common dealer price in his trade area at $360/st FOB for DAP and $375/st FOB for MAP last week. Forward contract DAP for February was referenced from one regional supplier at the $360/st mark FOB St. Louis.

The 10-34-0 market remained at $550-$675/st FOB in the region, with the low in western Iowa and Nebraska and the upper end in eastern Iowa. A Missouri source pegged the dealer market last week at the $625/st FOB level.

Southern Plains: Phosphate pricing was down from last report, with sources quoting the DAP market at $350-$365/st FOB Catoosa to the dealer. MAP was $20-$25/st higher than DAP, with reports of tight inventories at the port. 10-34-0 in the region was pegged at $625-$640/st FOB last week, reflecting a sizable drop from last report.

South Central: The DAP market was quoted in a fairly broad range at $330-$370/st FOB regional warehouses to the dealer, with MAP at roughly a $20/st premium. TSP was pegged at $310-$345/st FOB the warehouse. Sources reported some buying interest in phosphate prepay last week.

Western U.S.: Effective Jan. 8, Agrium’s MAP postings dropped to $445/st DEL to Montana and Wyoming; $450/st DEL to southern Idaho, Utah, Nevada, and Oregon’s Malheur County; $450/st FOB and $455/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County; and $460/st FOB or DEL in California and Arizona.

U.S. Export: Although PhosChem made no new export sales last week, traders were said to have done several deals to Latin American customers at prices in the range of $330-$340/mt FOB. Venezuela purchased about 60,000 mt, and was the biggest of the bunch.

Around the world, phosphate-processing plants have been either idled or shut down, and that has resulted in reducing potential supplies by about 3 million mt a month. Typically, export customers begin buying during the second quarter; if that holds true this year, supplies could run short. If supplies are insufficient, prices will begin to rise, although probably not to the high levels of last year. India has still not reached an agreement with its phosphoric acid suppliers, and will probably have to import DAP again this year.

Last year, India was a boon to U.S. phosphate producers and to other suppliers in the world. According to TFI’s December report, India received 3,036,916 mt of the 4,524,010 mt of DAP exported last year. Japan was the second largest customer with 290,326 mt, and Australia was third at 175,402 mt for the year. Despite a dismal final few months, the U.S. exported 1.2 percent more DAP in 2008 than in 2007. In the month of December, India, of course, was the most active with imports of 101.830 mt, with Kenya next at 32,446 mt, while Canada was third at 22,522 mt. DAP exports in December totaled 162,311 mt, down 54.4 percent from December 2007.

MAP exports in December were few and far between. Japan was the busiest with 12,352 mt and Canada had 8,988 mt for the month, which were the only export MAP customers. Total MAP sales in December were 21,342 mt, a decrease of 91.2 percent from the same period a year earlier. For the calendar-year-to-date, Canada was the top buyer at 463,983 mt of MAP, with Australia the next most active at 303,660 mt, followed by Brazil at 276,088 mt. The total for the year was 1,462,514 mt, a decrease of 33.1 percent for 2008.

Based on the sales by traders to Latin American customers last week, the export DAP price fell to $330-$340/mt FOB. Don’t look for much to happen in this market for another couple of months.

Bangladesh: BCIC has issued a tender to import 15,000 mt (65.5 percent BPL Min.) of phosphate rock. Offers shall be received up to Feb. 2 and are to remain valid for 30 days.

POTASH

Eastern Cornbelt: Potash was quoted at $750-$815/st FOB regional warehouses, depending on grade and location, with the low in Illinois and the upper numbers out of warehouse locations in Indiana and Ohio. One dealer said he expects spring potash volumes to range from 40-85 percent of normal in his trade area.

Western Cornbelt: Potash was reported at $700-$760/st FOB in the region. One source tagged the secondary market in his trade area at $725/st FOB for red granular and $735/st FOB for white granular.

Southern Plains: The potash market was tagged at $720-$750/st FOB regional warehouses. Reference prices FOB Carlsbad, N.M., remained at $794-$800/st, depending on grade.

South Central: Potash was pegged at $750-$800/st FOB regional warehouses to the dealer, reflecting a slight drop from last report. Several sources indicated that they have enough potash already under roof to carry them through spring. And with retail prices in the mid-$800s/st, sources were talking of a “quiet boycott” of potash by farmers. “We can only do what the farmer is willing to do,” said one, “and right now the farmer is just not willing to pay those kind of dollars. It’s hard to justify it with what they’re having to sell corn for.”

Southeast: Sources pegged the potash market at $810-$850/st DEL in the region, with the upper end quoted by a Carolina source for delivered granular tons.

U.S. Imports: Muriate of potash imports were down 12 percent in November, according to DOC statistics, to 855,553 st from the year-ago 972,319 st. However, July-November imports are up 30 percent, to 5.7 million st from the year ago 4.4 million st.

SULFUR

Tampa: Refineries keep pumping out sulfur – and nobody wants it. Storage is becoming more and more critical each day. That won’t help the industry much, as first-quarter price negotiations got underway last week.

According to TFI, the phosphate industry was producing only about 30 percent of its normal capacity in December, which was less than the 50 percent rate in November. Phosphate production rates will not likely increase until sometime in February or later, so the storage problem will only worsen in the meantime.

On the positive side, Martin put its new prill operation into production at Beaumont last week, and that will increase prill production to around 9,500 t/day for all facilities in the Gulf area, including 1,000 t/day at Galveston. A source said one refinery had resorted to pumping its sulfur production into a hole in the ground, but did not want to be identified. Vessels were still being used to store excess sulfur supplies.

Another possible method of storage would be using old salt-mine caverns for possible later recovery. However, projections were that sulfur would remain in excess supply for the next few years.

As negotiations got underway, talk in the industry was how low can it go. Some think $0/lt or lower. That could especially be a problem for Canadian suppliers, who were already operating at a break-even-or-loss point at production sites. Phosphate producers, who really don’t need sulfur now or for the next month or so, will not be in a big hurry to settle anytime soon, so watch for negotiations to drag on for some time.

West Coast: Mexican phosphate processors were taking supplies for California, but generally negative prices at source sites continued.

Vancouver: Spot prices at Vancouver were said to be as low as $40/mt FOB, which meant the price at the point of production had to be around $0/mt FOB. That price could continue to worsen.

U.S. Imports: Imports were reported to be off 21 percent in November, to 141,288 st from the year-ago 178,595 st. July-November imports were up 26 percent, to 1.08 million st from 854,953 st.