AMMONIA

U.S. Gulf/Tampa: The import market was reported as quiet last week, with no new business reported. Still, players pointed to lower numbers in the Black Sea, which would give buyers hope for lower prices for June.

In the meantime, there were continued rumblings that the NOLA numbers should – or could – fall. Assessments continued that product may be getting long; however, actually finding a barge to make a new spot deal a “go” was reported to be a problem.

Eastern Cornbelt: “Unbelievable” and “berserk” were two words used to describe market conditions in the region last week. Some sources said they’ve seen rate cutbacks in their territories, but it was difficult to ascertain whether the reductions were due to weather conditions or price resistance.

Spot ammonia pricing was up dramatically in the region, with sources quoting the range at $800-$820/st FOB. The low end was reported in Illinois, and although no actual sales were confirmed at that level, sources called it a firm price and said new sales will be made there when the spring prepay tons are cleaned up.

Agrium reposted anhydrous ammonia on May 6 to $805/st FOB E. Dubuque and Niota, Ill.; $810/st FOB Meredosia and Marseilles, Ill.; and $820/st FOB Cincinnati/Finney, Ohio. One supplier was referencing forward contract ammonia for June and beyond at $885-$895/st FOB in the region last week.

Western Cornbelt: Ammonia pricing was up significantly, with the dealer market pegged at $755-$800/st FOB regional terminals. Several sources claimed the higher numbers were the more prevalent dealer market as the week progressed, and some talked of posted levels now crowding the $875-$880/st FOB level from some suppliers. At the other extreme, however, were quotes from Missouri sources of delivered ammonia tons from southern production points available for as low as $700/st last week.

On a forward contract basis for June through November, one supplier was referencing ammonia last week at $875/st FOB in Nebraska, $880/st FOB in Iowa, and $885/st FOB in Missouri.

Agrium reposted anhydrous ammonia on May 6 to $755/st FOB Mankato, Minn., Greenwood, Neb., and Iowa terminals at Early, Garner, and Whiting; $750/st FOB Hoag, Neb.; $725/st FOB Clay Center, Kan.; $720/st FOB Conway, Kan.; $715/st FOB Mocane, Okla.; and $695/st FOB Borger, Texas. Agrium’s delivered postings from the Borger facility moved on May 6 to $720/st in Texas north of Interstate 40, and $725/st in Texas and Oklahoma south of Interstate 40.

Agrium also hiked its ammonia postings in the Northern Plains, with reference levels in the Leal, Velva, Grand Forks, and Beulah sales area in North Dakota moving on May 8 to $995/st FOB and $1,010/st DEL. Those levels reflect a $210-$215/st increase from the company’s April 17 ammonia postings in that location.

California: The anhydrous ammonia market remained at $700-$715/st DEL in the state, with aqua ammonia reported at $185/st FOB. One source said demand for ammonia on rice had eased in the northern part of the state, but some movement is still expected on cotton in the southern areas.

Pacific Northwest: The anhydrous ammonia market was climbing in the region. Sources tagged the market early in the week at $900-$950/st DEL in the region, but higher postings were taking effect.

Agrium’s May 1 anhydrous ammonia postings included $925/st rail-DEL in Oregon, Washington, and northern Idaho; $945/st truck-DEL in Oregon and Washington east of the Cascades, and in northern Idaho; and $950/st truck-DEL in Montana and northern Wyoming. The company took another increase on May 8, however, with ammonia postings moving up $135/st on that date to $1,060/st rail-DEL in Oregon, Washington, Idaho, and Utah; $1,080/st truck-DEL in Oregon and Washington east of the Cascades, and in northern Idaho; and $1,085/st truck-DEL in Montana and northern Wyoming.

One supplier was offering limited forward contract ammonia for June through November at $900/st FOB Ritzville, Wash., with forward contract aqua ammonia referenced at $225/st FOB Ritzville for that same period. Agrium’s aqua ammonia postings firmed on May 1 to $236/st FOB Central Ferry and Finley, Wash. The company followed that increase with another on May 8, bringing aqua ammonia postings in the region to $269/st FOB Central Ferry and Finley.

Western Canada: The anhydrous ammonia market had reportedly firmed to $1,032-$1,076/mt DEL in the region, up nearly $200/mt from early April levels. On the production front, Agrium said it was having a few problems getting its small Redwater, Alberta, nitrogen facility up and running after being down for some time. No other details were reported.

Black Sea: The KIP finally came down and prices are following. The KIP is now at $420/mt FOB. Sources said sales last week came in around $435/mt FOB. At the same time, however, there were reports of a deal at $460/mt FOB. Even with a deal at $460/mt FOB that indicates a softening of the high levels of area pricing.

The main demand for Black Sea ammonia remains the U.S., but Asian sources say some buyers in the Far East are beginning to show interest as the price falls.

The softness in the Black Sea market, combined with stagnant prices in the Middle East, has prompted some of the larger buyers in Asia to look more closely at picking up a cargo or two from this area.

Middle East: Producers are under pressure to lower prices. It seems Indian buyers are not taking as many tons as expected this time of year.

Even though some producers argue the price is above $500/mt FOB, the growing consensus is that the price settled at $480-$500/mt FOB last week.

With the Black Sea price in a steady decline, sources say the Middle East producers will have no choice but to follow.

Industry observers say the first move will probably come from Qafco. In fact, sources report that a sale to a Tampa buyer at $550/mt CFR is in the works. The netback for such a deal would be about $450/mt FOB.

Sources could not confirm the Qafco deal. One trader said, however, the mere fact that people are taking the talks seriously means the market is heading for further drops in price.

UREA

U.S. Gulf: Granular barge prices were up last week, but they did not go up at the same frenzied pace as the past two weeks. Most were putting new prompt sales within the $620-$630/st FOB range. Sources were calling the market rather calm compared to the huge run-up that was seen from $445/st FOB (GM April 21, p. 4) to $605/st FOB (GM May 5, p. 4) in recent weeks.

New prill business was reported as high as $610/st FOB, with sources saying that the product was trying to keep up with granular.

Eastern Cornbelt: Granular urea pricing covered a wide range as prices continually moved up throughout the week. Ohio sources said spot pricing out of the Cincinnati market firmed from $600/st FOB early in the week to $675-$680/st FOB by Thursday. An Illinois source quoted the dealer market firmly at the $640/st FOB level at midweek. The rapid run-up had several sources noting that retail sales could now be had at lower numbers than current replacement costs in some areas of the region.

Western Cornbelt: Granular urea pricing was up dramatically at $635-$660/st FOB regional terminals to the dealer, with the upper end reported in Iowa for confirmed new business. Agrium’s granular urea postings firmed on May 8 to $670/st FOB Shakopee, Minn., and North Dakota terminals at Alton, Carrington, Colfax, Marion, and Scranton, and $675/st rail-DEL in Minnesota, the Dakotas, and Wisconsin. Those levels reflect a $75/st increase from Agrium’s May 1 postings at those locations.

California: Additional price hikes were reported last week as producers launched another round of postings. The granular urea market covered a wide range, reflecting the movement of pricing throughout the week. Simplot raised its prices $75/st at midweek, with new postings reported at $650/st FOB French Camp, $660/st FOB Hanford, and $670/st FOB El Centro. Yara was also reportedly moving to $660/st FOB for bulk tons of urea.

Agrium’s granular urea postings firmed on May 1 to $575/st FOB West Sacramento, Calif., $595/st DEL in central California, and $600/st DEL in northern California. The company followed that price list with another on May 8, which took granular urea postings up an additional $100/st to $675/st FOB West Sacramento, $695/st truck-DEL in central California, and $700/st truck-DEL in northern California.

Pacific Northwest: Agrium’s granular urea postings firmed on May 1 to $595-$610/st DEL in Montana and Wyoming, depending on location; $620/st FOB Washington warehouses at Glade, Kennewick, Warden, and Wilson; $625/st DEL in Washington, Oregon, Idaho, and northern Nevada; $635/st DEL in northern and central Utah; and $640/st DEL in southern Utah.

Agrium took another increase on May 8, however, bringing urea postings up $75/st to $670-$685/st DEL in Montana and Wyoming, depending on location; $695/st FOB Washington warehouses at Glade, Kennewick, Warden, and Wilson; $700/st DEL in Washington, Idaho, Oregon, and northern Nevada; $710/st DEL in northern and central Utah; and $715/st DEL in southern Utah.

Simplot’s urea price took a similar course, moving up $75/st on May 8 to $695/st DEL in the region. On a forward contract basis for June, one regional supplier was referencing urea at $705-$710/st DEL in Montana, $720/st DEL in Washington, Oregon, and Idaho, and $720-$740/st DEL in Utah.

Western Canada: Granular urea was pegged at $675-$700/mt DEL in Western Canada, up $100/mt from last report.

India: Reportedly, agents from IPL and STC have been prowling the major producers looking for cargoes. At the same time, at least one major trading house has reportedly been talking to Indian buyers trying to cut a deal to cover part of the country’s needs.

Sources say part of the deal could involve tons still in Chinese bonded warehouses. Reportedly, cargoes in the warehouses with nominated vessels can still be exported under the old 35 percent duty. Making sure the paperwork is done correctly and each port authority is on board is the tricky part, said one trader.

The industry was abuzz last week on rumors that STC would soon be coming in for at least 300,000 mt. This rumor is on top of conventional wisdom that IPL will be calling a tender soon.

Last month, industry watchers said if the Indian buyers could hold off until the IFA conference, they might be able to shave a couple of dollars off the current international prices. The problem, sources said, was that India desperately needs the tons.

Each week of delay in placing an order might save a dollar or two at first, but once the buying starts sources say the price floodgates will be wide open.

Black Sea: Buyers keep saying the price has stabilized and producers keep asking for higher prices. So far, the producers are winning.

Some traders argue the price last week easily settled at $600-$620/mt FOB. By the end of the week, however, buyers were hard pressed to find anything below $620/mt FOB.

Business was reported at $620/mt FOB for sure. Sources added that any attempts to pay less were rebuffed.

As last week faded, some industry observers placed the market at $640-$660/mt FOB. The difference between what they were quoted and what others in the industry say appears to be the loading dates.

The higher-priced material is reportedly being shipped in mid or late June. The material priced in the lower $600s/mt FOB is heading out later this month or early next month.

The bottom line for just about anyone knocking on doors in Yuzhnyy is that the price goes up with each day.

With demand in Latin America still strong enough to provide a foundation for any other deals and India looming on the horizon with a demand for 6-8 million mt by year’s end, sources say the producers see no reason to lower their prices.

The only thing that could cut into unlimited price increases is the re-emergence of Chinese urea.

Some Chinese cargoes are already said to be offered in the mid $700s/mt FOB bagged. Some buyers might find the convenience of smaller shipments of bagged product to be preferable to the difficulties related to panamax bulk shipments from Yuzhnyy.

As of late last week the price was pegged at $600-$620/mt FOB, but higher prices will most likely show up by the beginning of this week.

Middle East: Sources say there is nothing available under $600/mt FOB at this time. Producers are happy to promote this idea, but some traders contend $590/mt FOB is still available. Any talk of $590/mt FOB by buyers, however, is a sure way to be shown the door by producers.

Reportedly, one trading house concluded a deal out of Egypt for a netback of $610-$620/mt FOB, depending on the product’s final destination.

For now, producers are opening their talks at $650/mt FOB and are only willing to listen to counter bids if the price remains above $630/mt FOB.

Sources say nothing has been concluded at these levels yet, but it is only a matter of time.

One trader reported a deal at $630/mt FOB but could not identify the buyer.

Producers are confident they will secure enough deals with India to ensure full order books well into the fourth quarter.

The area producers have the convenience of being able to ship in multiple sized vessels so the urea can be more easily unloaded near the areas that need it. The Yuzhnyy sales will have to come in panamax vessels, which restrict the ports for unloading.

Traders are said to be watching for a potential convergence of rising international prices and softening Chinese prices.

Even though the slide in prices in China has slowed, the steady increase in the global market could wipe out the impact of the 135 percent export duty.

One trader said if the Middle East price does hit $650/mt FOB and the Chinese continue to soften, the two suppliers could reach a convergence point that will allow Chinese tons back into the market.

The question at that point will not be if people are willing to pay more than $700/mt FOB for Chinese product, but whether the export paperwork can be processed and vessels secured. One trader noted that even if the market absorbs the higher prices, the Chinese central planners may find other bureaucratic ways to block urea exports.

For now, sources peg the market at $610-$630/mt FOB, with plenty of room to expand.

China: The 135 percent export duty is having an effect on domestic prices. Prices are coming down and more tons are being pushed into the domestic market. However, the global impact of the effort to reduce exports also means the international market price is rising. A number of industry observers predicted last month that eventually the marketplace will absorb the new export duty just as it did with the 30 and 35 percent duties earlier this year.

Now those predictions appear to be coming true.

At least one cargo of Chinese urea was picked up for an international buyer at $750/mt FOB bagged out of a northern port. Sources are not sure if the deal was a result of a contract that had to be honored no matter the prices, or if a real buyer was found. Observers are split on this.

Adding to the furor over Chinese pricing, sources report that Pakistan buyers are looking to Chinese material if Saudi Arabia does not come through with the tons TCP needs for this year. One trader was clear that if Sabic cannot supply the urea needed, the only recourse TCP will have is to take Chinese tons.

One trader noted that central planners in Beijing have to worry again about too many tons flowing out of the country.

Before the 135 percent export duty was put in place last month, China exported about 2.25 million mt – far more than during the same period last year.

The whole purpose of the increased duty, say observers, was to stem the flow of exported urea to ensure sufficient quantities at low prices for Chinese farmers.

Reportedly, some trading houses still have tons sitting in bonded warehouses that could possibly be exported under the old 35 percent duty.

Sources say the rules for exporting under the old price appear to be clear, but reports are now circulating that some port authorities are making their own interpretations.

In one port, reportedly, a buyer was able to shift loading from one nominated vessel to another. Sources said the port authority ruled that at least a vessel was nominated within the deadline. The replacement ship was allowed because of delays getting the originally nominated ship in on time.

At another port in a similar situation, however, the port authority said only the vessel named at the time the new export duty took effect would be allowed to take the tons at the lower price.

One trader said he was not surprised at the different ports/different rulings situation. He noted Chinese customs officials are notorious for looking for loopholes that are advantageous to them and their local operation.

Sources now report that imports of many of the inputs for fertilizer production are being banned until the end of August.

The ban is said to be in place to force factories to slow down production.

Area traders say the decision is tied to the upcoming Olympics. The Chinese central government wants as many plants shut down as possible to ensure reduced pollution levels for the athletic competitions.

Pakistan: Reports are circulating that TCP will be coming back in for 600,000 mt. Pakistan’s needs last year were not a part of market considerations because the country had reached a government level deal with Saudi Arabia for its urea needs.

Now sources question whether the deal will be renewed.

Sources say some funds remain under the old deal. If Sabic has the tons available, it will do what it can to honor requests from TCP. However, observers say what Sabic can offer is not enough to cover what Pakistan needs.

TCP has already started talks with China, sources say.

Any deal with China will mean purchasing cargoes in the mid-$700s/mt FOB and up.

The re-entry of TCP into the market could not have come at a worse time for all buyers.

The market was already heating up in anticipation of Indian purchases. Now that another 600,000 mt is needed for a buyer, sources expect to see the temperature really rise.

However, estimates by Fauji Fertilizer Bin Qasim Ltd. (FFBL) are not as bullish. FFBL says the country will need about 300,000 mt of urea to meet shortfall during the Kharif season ending September, 2008. Mr. S.A. Ahsan – chief financial officer/general manager, finance, of FFBL – told Green Markets that about 50,000 mt of urea has already been arranged from Sabic under Saudi Arabia’s special financial assistance. He expressed hope that TCP would soon issue a tender to import 150,000 mt of urea each in June and July 2008 respectively, under Saudi financing arrangements.

Indonesia: The selling tender PIM scheduled for May 9 will be postponed a couple of weeks. Sources say the delay is because the company will not have as much material available as it thought. The urea plant is experiencing shortages of natural gas, causing cutbacks in production. The tender was for two cargoes of 20,000 mt each.

NITROGEN SOLUTIONS

U.S. Gulf: Prompt barges were reported to be selling last week as high as $400-$405/st FOB ($12.50-$12.66/unit). The only real question was where the week began. There were rumors circulating of prices as low as $335/st, with the sellers flipping forward barges they had bought earlier from CF. However, these numbers could not be confirmed. Most sources wondered why anyone would sell at such a level when other barges were trading in the high $380s to $405/st FOB.

Eastern Cornbelt: UAN pricing was also on the march. Sources tagged the market in a broad range at $13.00-$14.00/unit FOB terminals to the dealer. That range was up significantly from last report, with the low reported in Illinois and the upper end confirmed later in the week at Cincinnati, Ohio, for dealer quotes from two different suppliers. Forward contract UAN-32 for June was on the table for $14.00-$14.30/unit FOB in the region last week, with higher prices for July and beyond.

Western Cornbelt: The UAN-32 market was moving up quickly last week. Sources quoted the dealer market at $410-$416/st ($12.81-$13.00/unit) FOB regional terminals, with reference levels from some regional suppliers expected to firm to $435-$448/st ($13.60-$14.00/unit) FOB for the next round of business. One supplier was referencing forward contract UAN-32 for June at roughly $14.35/unit FOB Minnesota terminals last week.

California: UAN-32 pricing was on the move, with sources quoting the market at $410-$430/st ($12.81-$13.43/unit) FOB in the state last week. Yara’s postings moved to $420/st ($13.13/unit) FOB late in the week, and Simplot was referenced at $430/st FOB Stockton, Calif., as of May 8, up $20/st from its previous level there. Agrium’s UAN-32 postings also firmed on May 8 to $423/st ($13.22/unit) FOB Sacramento, $440/st ($13.75/unit) truck-DEL in central California, and $445/st ($13.91/unit) truck-DEL in northern California.

Pacific Northwest: The regional UAN market firmed from $410/st ($12.81/unit) to $430-$435/st ($13.44-$13.59/unit) DEL in the region at midweek. Agrium’s UAN-32 postings firmed on May 8 to $430/st ($13.44/unit) DEL in Washington, northern Idaho, and Oregon excluding Malheur County; $435/st ($13.59/unit) rail-DEL and $440/st ($13.75/unit) truck-DEL in southern Idaho, Nevada, Utah, and Oregon’s Malheur County; and $460/st ($14.38/unit) truck-DEL in Montana and northern Wyoming. Agrium’s UAN-28 postings firmed on May 8 to $403/st ($14.39/unit) truck-DEL in Montana and northern Wyoming.

Western Canada: The UAN-28 market was reported at $423-$438/mt ($15.11-$15.64/unit) DEL in Western Canada, up some $60/mt from last report.

AMMONIUM NITRATE

Western Cornbelt: Ammonium nitrate pricing remained at $395-$400/st FOB in the region, prompting several sources to refer to it as the only “cheap source of nitrogen” in early May.

California: No market was reported for ammonium nitrate in the state. CAN-17 was quoted at $310-$335/st FOB, with the upper end in desert locations.

Pacific Northwest: Ammonium nitrate was reported at $454-$469/st rail-DEL, with the low end in Montana. CAN-17 remained at $294-$304/st DEL in the region. Agrium’s CAN-17 postings firmed on May 8 to $300/st FOB Kennewick, Wash. Agrium’s ammonium nitrate solution 20-0-0 postings moved on May 8 to $262/st FOB Kennewick.

AMMONIUM SULFATE

Eastern Cornbelt: Ammonium sulfate pricing was up from last report. Sources quoted granular product in a broad range at $320-$370/st FOB, with the low reported early in the week and the upper end confirmed out of inland shipping points in Ohio on Thursday. Honeywell announced at midweek that it was taking its prices up immediately to $350/st FOB or rail-DEL for granular product and $335/st FOB or rail-DEL for mid-grade sulfate.

Western Cornbelt: Granular ammonium sulfate was tagged at $320-$350/st FOB, with the low reported in Missouri and Iowa at midweek. The upper end reflected new postings from Honeywell for granular sulfate that went into effect last week.

California: Ammonium sulfate was pegged in a broad range at $310-$350/st FOB, with the low quoted for standard grade FOB Lathrop, Calif., and the upper end in desert areas of the state. Yara was reportedly referenced at the $330/st FOB level for coarse or standard grade sulfate.

Pacific Northwest: Most sources tagged the ammonium sulfate market at $335-$337/st DEL in the region, up slightly from last report. Agrium’s ammonium sulfate postings moved on May 2 to $342/st DEL in Montana, Wyoming, Idaho, Washington, Oregon, Utah, and Nevada, and $337/st FOB the warehouse in Washington, Oregon, Idaho, Utah, and Nevada.

Western Canada: Granular ammonium sulfate pricing had reportedly firmed to $480-$485/mt DEL, up $15/mt from last report. Sources said a crystallizer problem at Teck Cominco’s Trail, B.C., plant had affected the production of regular grade ammonium sulfate, resulting in short supplies of granular product as customers switched to that product in the interim. A repair of the crystallizer was expected by mid-month.

PHOSPHATES

Central Florida: Phosphate sales out of Central Florida, as well as the rest of the country, continued to slow last week due to weather conditions, which meant extremely wet conditions. Farmers growing corn have until June 1 to get their crops in the ground, and the usual cries of “rain, please rain,” have been replaced with pleas for relief and dry weather.

A DAP railcar sale was made by a trader at $1,025/st FOB last week and Mosaic sold a small amount of MAP at $1,095/st FOB, but other loadings were for orders placed earlier. With domestic sales in the dumps in recent weeks, producers expect more action and more product to be available for the international market.

As part of the consent order with state officials in Texas, Agrifos will stop producing super phosphoric acid to evaporate more water used in processing, and will produce another 150,000 st of DAP and MAP. That will bring the company’s capacity for DAP/MAP to between 500,000 st and 550,000 st.

The Central Florida DAP price range last week moved from a flat $1,000/st FOB the previous week to $1,000-$1,025/st FOB. PotashCorp’s Central Florida reference price stayed at $1,050/st FOB for DAP. Mosaic’s asking price was still $1,070/st FOB for DAP and $1,085/st FOB for MAP. CF’s price was $1,050/st FOB for DAP and $1,125/st FOB for MAP, which continued to be scarce. In Texas, Agrifos’s truck price remained at $1,050/st FOB for trucks and $1,045/st FOB for rail shipments.

U.S. Gulf: After another three inches of rain fell on Oklahoma, not to mention a couple of tornadoes, conditions on the Arkansas River remained problematic last week. Tows were restricted and allowed to carry only six barges, rather than the normal 12, and only during daylight hours. However, the heavy rain has meant farmers cannot get into their fields to plant corn, and the deadline was drawing near. Pasture land in Oklahoma and Missouri will go without phosphates this year due to the price of the fertilizer and the poor beef market. At Rosedale approximately 120 barges were waiting to be moved, and at that rate, it will take a long, long time to clear the traffic.

Fewer barges appeared to be available last week, but there were also fewer buyers. Those who were buying were doing so to top off their bins, and sellers’ profits from barges were far more meager than during the past several months. Instead of earning as much as $500/st barge traders were making closer to $5/st, which was more in line with years past, but not really worth the investment of $1.5 million per barge.

Most barge trading occurred early last week, and prices were showing signs of weakness. MAP, which had been extremely scarce on the river system, was more plentiful last week, although demand was down due to wet weather.

NOLA DAP barge sales last week were made between $995/st FOB early and $1,000/st FOB, which set the Gulf NOLA DAP barge range, while MAP barges were available at higher prices. The NOLA DAP barge price range the previous week was $995-$1,010/st FOB. Mosaic’s asking price for forward sales from June through August was $1,090/st FOB for DAP and $1,105/st FOB for MAP. CF was seeking $1,070/st FOB for DAP and $1,145/st FOB for MAP for prompt deliveries.

Eastern Cornbelt: The DAP market was quoted at $1,060-$1,107/st FOB regional warehouses last week, with the upper end reported by Ohio dealers out of the Cincinnati market. MAP was pegged at $1,075-$1,113/st FOB, with the upper end again in Ohio. Forward contract DAP for June and beyond was being offered last week at $1,104/st FOB Peoria, Ill. 10-34-0 pricing in the region was quoted at $850-$900/st FOB, where available.

Western Cornbelt: Phosphate pricing continued to firm. Sources quoted the DAP market at $1,020-$1,075/st FOB regional warehouses last week, with MAP reported at $1,055-$1,100/st FOB. Forward contract tons were available for June through September at $1,104/st FOB St. Louis, Mo., for DAP.

10-34-0 was pegged at $850-$900/st FOB in the region for any available spot tons, with confirmed sales at the upper end of that range last week.

California: DAP was quoted at a firm $1,175/st FOB or DEL in the region, with MAP at $1,160/st FOB or DEL. Agrium’s MAP postings moved on April 22 to $1,160/st FOB or rail-DEL in California and Arizona. Simplot’s April 19 phosphate postings in the California market include DAP at $1,175/st FOB or DEL and MAP at $1,160/st FOB or DEL. Simplot also moved its 16-20-0 postings up on April 19 to $615/st FOB Lathrop and $622/st FOB other warehouses in California. The company’s 0-45-0 TSP postings firmed $85/st on April 19 to $925/st FOB or rail-DEL in California.

10-34-0 was quoted at $566-$576/st FOB in the state, up more than $40/st from last report.

Super phosphoric acid (SPA) and merchant grade acid (MGA) were tagged at a firm $13.20/unit DEL in the state, reflecting another round of posting hikes on May 1. Simplot reposted SPA and MGA on that date at $13.20/unit rail-DEL in its western sales area, with MGA postings FOB Lathrop and El Centro moving on May 1 to $13.40/unit. Agrium’s postings for SPA and MGA moved on May 1 to $1,320/st rail-DEL in Arizona and California.

Pacific Northwest: Phosphate prices in the region were quoted at a firm $1,145-$1,160/st DEL or FOB for MAP, with the low in Montana. DAP was quoted at $1,160-$1,175/st FOB or DEL, with the low again for delivered tons in western and central Montana.

Agrium’s most recent MAP postings included $1,145/st DEL in Montana and Wyoming; $1,150/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $1,150/st FOB and $1,155/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County. Simplot’s postings include DAP at $1,170/st and MAP at $1,155/st DEL in Washington and Oregon; DAP at $1,165/st and MAP at $1,150/st DEL in Idaho and Utah; DAP at $1,160/st and MAP at $1,145/st DEL in western and central Montana; and DAP at $1,175/st and MAP at $1,160/st DEL in eastern Montana.

16-20-0 was reported at a firm $615/st DEL in the region, up considerably from last report. Simplot’s 16-20-0 postings moved up $40/st on April 19 to $615/st rail-DEL in the region, and 0-45-0 TSP postings firmed $85/st on April 19 to $880/st FOB Pocatello, Idaho.

10-34-0 was pegged at $563-$620/st FOB and up to $625/st DEL in the region. Simplot’s 10-34-0 postings moved up $51/st on April 25 to $563/st FOB Pocatello.

Phosphoric acid postings as of May 1 included SPA and MGA at $13.20/unit DEL in the region, and sources said significantly higher prices are expected in June. Simplot’s May 1 postings were up $1.50/unit from April levels at $13.20/unit rail-DEL from Pocatello to points within the company’s western sales area. Agrium’s postings for SPA and MGA also moved on May 1 to $1,320/st rail-DEL in Idaho, Montana, Nevada, Oregon, Utah, Washington, and Wyoming.

Western Canada: The MAP market in the region was quoted at $1,335-$1,370/mt DEL last week.

U.S. Export: PhosChem made no new sales last week, but it was revealed that it had struck a deal with India the previous week to sell 200,000 mt. Apparently, PhosChem withheld the information on the deal at the request of the Indian customer, but the government there revealed it anyway. The price was formula based and to be determined at the time the ships are loaded, based on published prices. Meanwhile, freight rates to India have climbed from $85/mt to $115-$120/mt.

China began clamping down on its export of phosphates, and last week a vessel on its way out of port was required to return to the dock. China is seeking to retain more of its domestic production for its own use. The Chinese exports that departed before the deadline will have been delivered within the next couple of weeks, and the market was expected to reflect the upcoming shortage around the same time or shortly after. In the U. S., domestic sales of phosphates have fallen short of expectations due to wet weather, but the export market was expected to easily take up the slack.

Tunisia agreed to sell two vessels of phosphate into Vietnam last week at a price between $1,200/mt FOB and $1,220/mt FOB.

In Argentina, farmers were back on strike last week. That will have a temporary impact on exports to that country, but once the strike is settled, phosphates will begin to move quickly there to make up for the shortfall.

The food shortage crisis in many developing countries, plus the disastrous cyclone that struck Burma last week, will likely result in more grain sales as the United Nations and aid organizations seek to relieve the suffering.

The DAP export price range last week was unchanged at $1,225-$1,230/mt FOB, due to a lack of new sales.

Pakistan: Fauji Fertilizer Bin Qasim officials have ruled out any import of DAP during the Kharif season (ending Sept 2008) owing to sufficient inventory levels. Their plant at Port Qasim has already resumed production after being shut down for 79 days, and will now provide 60,000 mt of DAP for May. However, FFBL estimated that the country would import about 200,000 mt to 250,000 mt of DAP during the 3rd and 4th quarters of the year. The company says it will not set up a new DAP plant, as their total capacity stands now 650,000 mt/y and the new plant is not feasible under the present economic scenario.

FFBL does believe DAP prices will go up further in the international market due to significant demand from India and Latin America and the higher duty of China on fertilizer exports. The company forecasts that during the next three to four years, DAP prices will remain on the high side unless there is a change in raw material prices. Hence, FFBL has sought government assistance through subsidies against the prevailing Rs. 470 per bag of DAP. The increase in support prices of commodities from the government will also help farmers to buy fertilizer.

Meanwhile, this month FFBL will receive the first shipment of about 25,000 mt phos acid from the Pakistan Maroc Phosphore S.A. Morocco (PMP) plant, which has successfully been completed in record time in Morocco. Sulfuric acid and phos acid (28 percent concentration) production commenced on March 27 and April 4, respectively. Production of marketable phos acid, i.e., 54 percent concentration, started on April 8.

POTASH

Eastern Cornbelt: Potash was generally quoted at $625-$680/st FOB regional warehouses to the dealer, reflecting another increase from the prior week. Some sources maintained that spot tons could still possibly be had for as low as $565-$570/st FOB, but others were adamant that while these numbers were doable two weeks ago, they were no longer in effect last week.

Western Cornbelt: Potash was pegged at $625-$675/st FOB regional warehouses last week, up again from the prior week, with the top of the range reported in Iowa for new list prices on the secondary market. A Missouri source pegged the river terminal market last week firmly at the $650/st FOB mark for new business.

California: Potash was quoted at $700-$770/st DEL in the state, depending on grade.

Granular sulfate of potash (SOP) was pegged at $815/st FOB as of May 5, with water soluble SOP referenced as high as $955/st FOB for bulk and $1,015/st FOB for bags. Those levels were up significantly from last report. Due to the continued global potash market supply and demand pressures, K+S North America announced that it was raising its SOP prices by $100/st per U.S. ton on all grades, effective with shipments on May 5.

Sources tagged the California potassium nitrate market at $1,160/st FOB for bulk and $1,230/st FOB for bags as of May 1, up $150/st from last report.

Pacific Northwest: Potash was pegged at $583-$600/st FOB for spot sales, with one supplier expecting a firm price of $650/st FOB to take effect June 1. Some were still taking delivery of tons ordered earlier at the $538/st DEL level, but no new business was confirmed at that lower number last week.

Agrium’s 60 percent red premium potash postings for the July 1 forward shipping period include $636/st rail-DEL and $641/st FOB in southern Idaho, Utah, and Oregon’s Malheur County; $641/st rail-DEL and $646/st FOB in Washington, the Idaho panhandle, and Oregon excluding Malheur County and the Willamette Valley; and $646/st rail-DEL and $651/st FOB in Oregon’s Willamette Valley.

Intrepid Potash’s postings FOB Moab, Utah, firmed on May 1 to $532/st FOB for 60 percent granular and $526/st FOB for 60 percent standard. Postings at Wendover, Utah, moved on that date to $550/st for 60 percent granular potash and $544/st for 60 percent standard grade potash.

Western Canada: No current prices were reported for potash in the region last week.

SULFUR

Tampa: There were some signs international sulfur prices may be reaching a peak last week. The sharp reduction in imports by China will allow more sulfur to become available on the world market. However, the United Arab Emirates moved up its price of sulfur for May by $50/mt FOB to $720.25/mt – after increasing $40/mt FOB in April.

However, in this country, sulfur supplies remained extremely tight and there were no signs that situation will be changing anytime soon. A Central Florida phosphate producer – most likely CF – was attempting to arrange to obtain more sulfur from Canada from sources that had been inaccessible in the past. Mosaic was known to have made a similar move within the past month or so.

Most refineries were operating at below normal production levels, in part because of the high price of oil, but also due to problems and turnarounds. Production at phosphate processing plants was down as a result, but the domestic market for their products was also down due to wet weather in important grain growing areas. The export market was expected to take up the slack in phosphate sales.

Unlike the situation three months ago, no one was speculating last week on how much of an increase in price sulfur suppliers will be seeking for the next quarter. Regardless, the price was still likely to go up again, because the U. S. cost for Tampa lags several hundred dollars behind the world market.

MARKET NOTES

Mozambique: Government officials report that the country has awarded Rashtriya Chemicals and Fertilisers (RCF) a contract to set up a $1.9 billion fertilizer plant as soon as local gas deposits can be used to power the project. Agriculture Minister Soares Nhaca said the ammonia, urea, and phosphates plant would be funded by state-run RCF and South Africa’s Industrial Development Corp. (IDC), who would also seek bank loans to supplement financing. The plant would reportedly be built in the southern province of Inhambane.

Pakistan: The Ministry of Food, Agriculture and Livestock (MINFAL) has proposed a Rs22.5 billion (US$ 340.90 million) subsidy on fertilizers in the coming 2008-09 budget (Jul-June) against the Rs17 billion allocated in the 2007-08 budget. MINFAL has proposed a total subsidy of Rs13.2 billion on DAP and Rs 4.9 billion on urea out of total proposed allocations. The estimated consumption for DAP is 1.4 million tons.