AMMONIA

U.S. Gulf/Tampa: While the last done business at Tampa continues to be called $275/mt DEL, sellers last week could point to some higher nearby trades. Terra was reported to have sold 17,000 mt for delivery to Savannah for the first half of September for $284/mt DEL. In the meantime, PotashCorp was reported to have sold 10-15,000 mt into Donaldsonville at $286/mt DEL for second half September arrival. This is in line with other recent Donaldsonville sales that were pegged within the $283-$287/mt DEL range.

The thinly-traded NOLA barge market was also finally getting some actual business, said sources, who put the market at $270-$275/st FOB.

U.S. ammonia imports were off 23 percent in June, to 671,592 st from the year-ago 877,028 st, while for the fertilizer year ending in June, imports were up 2 percent to 8.4 million st from the prior year’s 8.2 million.

Eastern Cornbelt: Anhydrous ammonia remained in the $335-$345/st range FOB regional terminals, with the low in Illinois. Effective Aug. 17, Agrium’s ammonia postings moved to $360/st FOB Illinois terminals at E. Dubuque, Niota, Meredosia, and Marseilles, and $365/st FOB Cincinnati and Finney, Ohio.

Western Cornbelt: Anhydrous ammonia was pegged at $330-$340/st FOB regional terminals, with the low end quoted by an Iowa source last week. Agrium’s postings moved up again on Aug. 17, reflecting a $10/st increase from the company’s Aug. 2 prices. New list prices include $355/st FOB terminals in Iowa, Minnesota, and Nebraska; $350/st FOB Clay Center, Kan.; $345/st FOB Conway, Kan; $340/st FOB Mocane, Okla.; and $315/st FOB Borger, Texas. Delivered ammonia postings from the Borger location moved on Aug. 17 to $335-$340/st in Texas, with the low north of Interstate 40 and the high south.

California: Anhydrous ammonia was steady at $425/st truck-DEL in the state.

Pacific Northwest: Delivered ammonia was quoted at $335-$345/st in Montana, and roughly $345-$355/st in Washington and Idaho.

Western Canada: Anhydrous ammonia remained at $444-$479/mt DEL in the region.

Asia: With recent sales to India, Petronas has now cleared out its surplus material. As a result, Asian buyers should not expect too many more breaks in prices.

Adding to the grief of buyers are reports that KPA in Indonesia will be taking a turnaround next month. While sources say Mitsui will not allow any of its regular customers to go wanting, new purchases may have to be put off until the plant comes back on line.

The Mitsubishi/KPI facility in Indonesia is reported to have a small surplus but, say Asian sources, don’t count on that lasting long.

A strike at a major plant in South Korea continues to soften demand from that country. Unfortunately for buyers, the reduced demand from Korea is being nicely balanced with the shortage that will occur when KPA goes down for a month. Sources add that the marketplace has already taken into account the strike and announced turnaround, so no movement is expected in the market based on these two events alone. Observers note that pressure on prices is coming from the Middle East as supplies there tighten.

Middle East: Sources report sellers are looking to move the price up. Reportedly, the last of the surpluses from the region were sold in the past couple of weeks to Indian and Far East buyers. With the surpluses gone, producers are looking to move up the price for the last quarter of the year. Still, as of last week, no new business at higher levels was reported.

SAFCO IV remains dormant, say Asian observers. Once it is fully operational, however, expect to see additional tons making their way into urea production and traditional markets such as India and the Far East.

Black Sea: With reports that the U.S. price is on its way up, Asian sources expect to see a similar increase in the Yuzhnyy price. As of last week nailing down the exact pricing level remained difficult, but reports from around the globe make it clear that the line in Yuzhnyy is getting longer and supplies are getting tighter.

UREA

U.S. Gulf: Prompt NOLA granular barges were reported to have traded last week within the $224-$225/st FOB range. Some sellers said prices are moving up and that quotes are now $227-$230/st FOB for the next round of trading.

In the meantime, some buyers who were scoffing at the newer price ideas acknowledged that prices had moved closer to the mid-$220s/st FOB. Low demand and low inventories, noted one. Buyers argue that the season is still to take off in the wheat belt and that many players may simply not bother to rush tons up the river this fall before it closes. They say it might be just as economical to source product from Canada and have it delivered closer to when they actually need it. Buyers also fear that prices will start to go down as the fall progresses and more imports start arriving at NOLA. Like so many others, they cite concerns that China’s material coming on to the market Oct. 1 may also have a significant impact on prices.

While U.S. urea imports were off 53 percent in June to 127,190 st from the year-ago 270,804 st, imports for the year were up 24 percent, to 6.8 million st from 5.5 million st.

Eastern Cornbelt: Granular urea was steady at $250-$260/st FOB in the region, with the low on the Illinois and Mississippi rivers on a spot basis.

Western Cornbelt: Granular urea remained at $250-$255/st FOB, with postings as high as $270/st FOB in the region.

California: Granular urea was unchanged at $310-$320/st FOB and $320-$330/st DEL in the state, with no recent business reported to test the market.

Pacific Northwest: Granular urea was $260-$270/st DEL in Idaho and Washington for new pricing, although many dealers booked fill tons earlier at the $245/st DEL level. Montana sources last week continued to peg the spot urea market at $245-$250/st DEL. One supplier was offering forward contract urea for September at $285-$290/st DEL in Montana, $295/st DEL in Oregon, Washington, Idaho, and Utah, and $305/st DEL in Wyoming.

Western Canada: Granular urea pricing was $325-$345/mt
DEL in the region.

Black Sea: Despite the protestations of many in the industry, several industry observers maintain the Black Sea market has all the makings of being soft.

The Helm business done in the IPL/India tender showed a netback of about $197/mt FOB. Reports of other cargoes showed a slight strengthening, but only at levels just under $210/mt FOB.

Big swings reportedly occurred in top-off tons where $215/mt FOB was quoted, and as Green Markets went to press there was a report of 20,000 mt bought at $217/mt FOB. Producers are claiming $220/mt FOB.

Many in the industry doubt the producers’ numbers.

Sources report much of the business taking place now is not for end-users, but rather trading houses taking positions. It was easy during the week to identify business at $210-$215/mt FOB. Higher numbers started to come in at week’s end.

On the heels of the IPL business reports circulated that Transammonia did a panamax to a Brazilian buyer. Depending on who is talking, the price nets back anywhere from $210/mt FOB to $218/mt FOB.

One trader estimated the business around $240/mt CFR, then backed off $22/mt for panamax freight plus additional costs of $2/mt and came up with $216/mt FOB. Another used handimax freight for a netback of $210/mt FOB.

Once all the math is done by the bulls and bears, Asian sources say there is little shown to justify the price being promoted by the producers, just as there is little to justify the current run-up in prices.

Producers cannot be blamed for trying to push the price up now, said one observer. In 45 days China reenters the international market. Sources say half-a-million tons being made available beginning Oct. 1 is not out of the realm of possibilities. At the same time, demand for prills is not expected to spike to match the increased availability of the product.

To throw cold water on the argument for higher prices, one trader noted that even last week finding a home for product at the $208/mt FOB level was difficult. He added that a buyer coming in mid-week with a bid of $208/mt FOB could have had a deal in a New York minute. The problem remains finding a buyer willing to pay that level.

To him, the apparent willingness to sell below what many are saying is the market indicates the producers are not as bullish as their words proclaim.

The August line-up is impressive and is leaving people who need a few prompt tons to pay a much higher price. Those who can wait for a September loading, however, should be in better shape, said one source. There is still a lot of urea left for sale next month, and the more time elapses, the closer the entrance of Chinese material comes.

Correction: Green Markets is adjusting its Black Sea urea price for the issued dated Aug. 14 to $195-$212/mt to reflect business occurring near press time.

India: Some of the confusion in the deals with the Black Sea come down to freight rates and ship size, said one source.

The Helm business was reportedly done with a handimax that would allow a better discharge rate than those offering panamax cargoes.

It seems IPL was – and remains – willing to pay a little more on the delivered cost of their material by buying a smaller vessel in return for a faster unloading rate at a more convenient port.

Sources say we should see IPL coming back into the market sometime in late September for another tender.

Bangladesh: To no one’s surprise, BCIC has yet to make a decision on the Aug. 3 tender. For the offers that do not have long validity dates, BCIC is asking for an extension. So far, there appear to be no objections.

By and large BCIC rarely moves quickly on settling tenders, said one trader. The problems are now apparently aggravated by a possible government change. At the same time, the buyer is apparently looking at the possible availability of 500,000 mt of Chinese urea beginning Oct. 1 as having a dampening effect on prices.

One trader noted that the offers made fairly reflected that anticipated move of Chinese material, but what was not expected was the continued decline in the Chinese domestic market. This drop is getting the BCIC bean counters to wonder if holding off might not make better economic and political sense.

Two more tenders are expected to be called. The months of September and October should both see tenders for 100,000 mt each of granular and prilled urea.

With the August tender yet unawarded and letters of credit still unopened from the July tender, the country is getting to a point where it will have to settle with sellers quickly.

Middle East: Producers quickly sold tons to India to get their inventories under control. Sources point out that the tons sold before the IPL/India tender were sufficient to prevent the storage warehouses from coming apart at the seams. The subsequent sales in the tender provided a small amount of breathing room into September.

Most producers, while comfortable, still reportedly have tons available for September loadings. This is not a situation the producers are happy about. With August half done, producers usually like to have their order books filled for the next 45 days – and right now, that is not the situation.

To ease some of the pressure on granular, PIC and Sabic are reportedly ready to have maintenance shutdowns either later this month or early next month. One source said PIC is expected to go down mid-September and stay down into November.

While this will ease some pressure on the producers to lower prices by taking major granular operations out of production, the fact that Iran and Egypt are still churning out tons and demand is soft does little to help the situation.

The business with India had set the market in the low $200s/mt FOB for granular. Sources are now reporting rumors that a deal with a U.S. buyer came in with a netback of $200/mt FOB or so.

This price, while likely but unconfirmed, is just a part of a multi-tier pricing plan by the producers.

All told, sources still say the market is stable, but with definite signs of softening coming.

The prilled market has similarly gone quiet now that the Indian business is out of the way. Sources report the price remains stable, but come Oct. 1 many potential Asian buyers are expected to shift their buying gaze to China.

With the Philippines and Vietnam looking at more flexible cargoes already bagged from China versus bulk orders in larger sizes from the Middle East, sources expect to see talks with most Asian buyers collapse soon.

By the end of the week, sources were reporting new granular business out of Eqypt at $220/mt FOB

China: Producers and government officials are reportedly anxious to move up the price. However, as one trader noted, the market will set the price and is doing so now.

The domestic market price drives the international price. And the current rate is pegged at $210/mt FOB bagged, with more room to fall.

With the end of the domestic application season there is no reason for the price to stay stable, let alone go up, said one trader. The producers are under social and political pressure to keep producing to ensure that no layoffs occur. As a result of no local market and a need to keep producing, more and more urea is being turned out – and the only place it can go for the next couple of months is offshore.

With Vietnam setting its price at $240/mt CFR bagged, the Chinese material will have to come down to compete. Of course, as one observer noted, playing that game with Vietnam only means chasing a falling market. The Phu My plant has in the past dropped its price to prevent imports from seriously competing, and is expected to do so again.

One major customer of Chinese product is expected to be BCIC/Bangladesh once the company and government agree on making awards in the previous tenders.

August through October should see about 300,000 mt of Chinese urea booked for Bangladesh. This amount, however impressive it may sound, is only a portion of the tonnage that is expected to be available monthly. Some tons may find their way to other Asian buyers, and some may even make it across the Pacific to the Americas. But there will still be tons unsold.

The economics of the situation, say observers, means the market will be soft.

Vietnam: The operators of the Phu My plant have set a new price at $240/mt CFR port equivalent. What that means is that if the Chinese hope to sell any tons to Vietnamese buyers, they will have to bring their price down from their current ideas.

Sources say if the imported price does reach parity with the domestic goods, they expect to see Phu My once again drop its price.

Sources figure Vietnam will need one, maybe two, large cargoes to finish off the year. The beauty of buying from China – besides a low price, said one observer – is that buyers can take smaller quantities and have the shipment delivered right to a nearby and convenient port, rather than to a larger port and then face the problems of land transfers.

NITROGEN SOLUTIONS

U.S. Gulf: Most sources say that actual prompt UAN barges are hard to find right now and cite more and more quotes for forward tons. And those quotes keep getting higher. Most hone in on East Coast cargoes being quoted in the $190-$195/mt DEL range.

UAN imports were off 52 percent in June, to 98,819 st from the year-ago 206,266 st. For the fertilizer year ending in June, imports were up 5 percent, to 2.9 million from the prior year 2.7 million st.

Eastern Cornbelt: UAN-28 pricing was steady at $155-$165/st ($5.54-$5.89/unit) FOB terminals in the region.

Western Cornbelt: UAN remained at $5.40-$5.78/unit FOB regional terminals in mid-August.

California: UAN-32 was $200-$210/st ($6.25-$6.56/unit) FOB and $210-$225/st ($6.56-$7.03/unit) DEL in the state, with the upper end of the delivered range reflecting list pricing.

Pacific Northwest: UAN-32 was pegged at $205-$215/st ($6.41-$6.72/unit) in the region, with the low end quoted for railed tons in southern Idaho and the upper end for trucked material in Washington.

Western Canada: UAN-28 was steady at $207-$220/mt ($7.39-$7.86/unit) DEL in the region.

AMMONIUM NITRATE

U.S. Gulf: Barges continued to be called within the $195-$200/st FOB range.

U.S. imports were off 43 percent in June at 53,049 st, down from the year-ago 92,917 st. For the fertilizer year ending in June, they were up 42 percent to 1.4 million from the prior year’s 962,166 st.

Western Cornbelt: Ammonium nitrate was $255-$260/st FOB in the region.

California: No market was reported for ammonium nitrate in the state. CAN-17 was unchanged at $210/st FOB and $230/st DEL.

Pacific Northwest: Ammonium nitrate was pegged at roughly $270-$275/st rail-DEL in Idaho and Washington. CAN-17 remained at $215-$222/st FOB or DEL.

AMMONIUM SULFATE

United States: U.S. imports for the year ending in June were off 3 percent, to 346,956 st from the prior year’s 358,616 st.

Eastern Cornbelt: Granular ammonium sulfate was unchanged at $150-$155/st FOB.

Western Cornbelt: Granular ammonium sulfate was steady at $150-$155/st FOB and $155/st DEL in the region.

California: Ammonium sulfate was quoted at $175-$185/st rail-DEL, while dealer pricing out of regional warehouses was pegged in a broad range of $180-$205/st FOB.

Pacific Northwest: Granular ammonium sulfate was $170-$175/st DEL in the region, with postings from one regional supplier at $175/st FOB and $180/st DEL in the Pacific Northwest.

Western Canada: Granular ammonium sulfate was $270/mt DEL in the region.

PHOSPHATE

Central Florida: Those planning to order before CSX Transportation’s new rates on Sept. 1 will have to move fast in order to take advantage of the savings or avoid the higher cost. Mosaic was virtually out of DAP for August delivery, but other producers may be able to fill the order. On that date, CSX will add its seasonal adjustment of $250 per car, or $2.50/st. In addition, the railroad will hike its fuel surcharge from 19.2 to 20.8 percent. For locations in the Midwest, that represents an increased cost of between $3 and $4/st FOB. For more distant locations, the increased cost will be higher, up to $5/st in the Dakotas.

The weight around the necks of both traders and producers was a lack of activity by farmers. Dealers took a beating in the spring season and don’t plan to order until product is going out the door, even if it means their inventories will remain low. Some dealers were said to be first selling a truckload, then only reordering the same amount. If the rains come, dealers will soon run dry and traders will have to scramble to find the transportation to reach them in time.

Sales last week were up slightly and inquiries were up even more, but overall sales were slack, even for this time of year. One source said he believed he could buy as low as $219-$220/st FOB, but no sales in that range were made. The Central Florida DAP range was $223-$226/st FOB last week, compared to $223-$227/st FOB the previous week. Mosaic’s posted price remained at $235/st FOB but was selling as low as $226/st FOB, and CF’s posted price was said to be $227/st FOB, with sales at $223/st FOB. Prices do not include discounts; however, some large buyers can obtain a lower price without a discount from some producers. CF was said to be selling DAP as low as $223/st FOB. Mosaic discounts MAP $4/st from the price of DAP, while CF has no price difference. PotashCorp’s Central Florida reference price remained at $245/st FOB. In Texas, Agrifos’ prices were unchanged at $255/st FOB for DAP and $261/st FOB for MAP.

U.S. Gulf: Business on the river system continued to be much slower than normal for this time of year last week. NOLA DAP barges from two sources were said to be available last week – those Miss Phos barges were being resold at about $225-$226/st FOB, and barges from Mosaic were being sold in the $230-$231/st FOB range. However, the delivered price of the two was much closer than it appeared, because Mosaic was using its existing barge contract, which has lower rates than spot fares used by many of the Miss Phos barges. Location may also be playing a factor in reducing transportation costs.

The main thing slowing farmers down is drought in the areas where planting or field preparation would normally have started or should be about to get started. The driest areas in Oklahoma and Texas received some spotty rain last week. An inch-and-a-quarter fell in some counties, while adjacent counties received less than 0.02 of an inch. Other areas of the Midwest were also receiving less than normal rainfall. As a result, some product began moving out of warehouses on a limited basis. One source said dealers won’t tell traders what they will need, because farmers won’t tell dealers what they need. “The farmers tell the dealers, ‘you tell me how much rain I’m going to get and when, and I’ll tell you how much fertilizer I need,’” said the source.

The drought in that area has put the brakes on what would normally be the beginning of the fall season. Most have said business was worse this year than last year, which was not a good year. Grain prices fell last week to below $2/bushel, and that is not likely to send farmers rushing to buy more fertilizer. In addition, the wheat crop in Oklahoma and Texas was said to be of such poor quality it was not suitable for flour and was getting only about half price. Meanwhile, fuel prices continue to plague the industry from bottom to top. All bad signs.

A reminder that the U.S. Army Corps of Engineers will close two locks on the Arkansas River for two weeks on Sept. 9, which means barges will need to leave New Orleans within the next week or so in order to beat the closing. Urea, more so than DAP, would be affected in that region.

New sales last week put the NOLA DAP barge price range at $225-$231/st FOB. Freight played the biggest factor in the difference in barge prices.

Eastern Cornbelt: DAP and MAP were both quoted in the $260-$270/st FOB range out of most river terminals, with dealer postings reported at higher numbers. No market was reported for TSP, and 10-34-0 was steady at $250-$265/st FOB in the region.

Western Cornbelt: DAP and MAP were quoted at $260-$270/st FOB in the region. TSP was a nominal $240-$245/st FOB, and 10-34-0 was pegged at $255-$265/st FOB.

California: MAP was steady at $315-$320/st FOB warehouse or DEL, with the low for railcars and the high for trucked tons. DAP was $5/st higher than MAP. 10-34-0 was up slightly to $248-$253/st FOB in the state, and 16-20-0 was quoted at a nominal $235-$240/st FOB.

Ortho-phosphoric acid was pegged at $5.45-$5.55/unit DEL, with super-phosphoric acid at $5.55-$5.65/unit DEL in California.

Pacific Northwest: MAP was pegged at $295-$305/st FOB or DEL in the region, with DAP $5/st higher. 16-20-0 remained at $235-$240/st DEL, and 10-34-0 was $255-$265/st FOB or DEL in the region. Super-phosphoric acid was $5.55-$5.65/unit DEL, and ortho-phosphoric was $5.45-$5.55/unit DEL in the region.

Western Canada: MAP was pegged at $390-$415/mt DEL in the region.

U.S. Export: Last week, PhosChem made an export sale to an unidentified buyer in an unidentified country of 20,000 mt of DAP at $260/mt FOB. In addition, it was in the final stages of closing a deal to sell 5,000 mt into Central America at $263/mt FOB. India was said to be likely to purchase again relatively soon, and while there is interest in Pakistan, they will not likely start any large scale buying for another two months. Russia and Jordan were still out of product last week and will be for two-to-three more months, which was good for PhosChem.

The Fertilizer Institute released its export statistics for July last week. India continued to be the biggest U.S. DAP customer, receiving 347,431 mt, a 23.1 percent increase over last year at that time, while China was second at 63,000 mt, about the same as last year, and Brazil the third largest was shipments of 50,022 mt – a whopping increase of 567.3 percent over last year. Overall, exports were down 11.8 percent. For the calendar-year-to-date, India, PhosChem’s hungriest consumer, had a 31.1 percent increase over the previous year to 1,130,846 mt, China had a decrease of 32.5 percent at 635,911 mt, and Mexico was third so far this year with 325,622 mt, a decrease of 6.1 percent. For the calendar-year-to-date, total sales were 3,331,736 mt, a decrease of 17.2 percent.

TFI said MAP sales were up 51.9 percent in July over the same period last year, to 251,921 mt, with Brazil at 82,726 mt and Argentina at 54,765 mt, which represented increases of 85.2 percent and 92.3 percent, respectively. For the calendar-year-to-date, total sales were down 31.4 percent at 1,256,097 mt, a decrease of 31.4 percent. Canada was the biggest buyer at 287,413 mt, an increase of 4.5 percent, followed by Australia at 248,347 mt, a 47.8 percent drop, and Argentina at 186,328 mt, a small drop of 1.7 percent.

The export DAP price range was unchanged last week from the previous week’s $260-$263/mt FOB.

Bangladesh: BADC has issued a tender to import 50,000 mt of TSP. A minimum quantity to be offered in a single lot was 12,500 mt. Bids are due on Sept 20, 2006. The government has asked BADC to import 200,000 mt of TSP and 100,000 mt of MOP during 2006-07 (July-June).

India: GNFC has issued a tender for 200,000 mt standard MOP for arrival during August, 2006 thru January, 2007. The tender closes Aug. 18; offers to are to remain valid until Aug. 31. The arrival schedule is as follows—Pink MOP: Chennai port – 25,000 mt each by the 25th of August, September, October, and January; Mundra port – 25,000 mt in October. White MOP: Dharmatar port – 25,000 mt in September and 25,000 mt in January; Mundra port – 25,000 mt in October.

POTASH

United States: U.S. imports were off 29 percent in June,
to 593,742 st from the year-ago 831,490 st. For the fertilizer
year ending in June they were off 13 percent, to 9.8 million
st from the prior year 11.3 million.

Eastern Cornbelt: Potash remained at $195-$200/st FOB in the region, with the low reported by Illinois sources out of river locations.

Western Cornbelt: Potash was $193-$200/st FOB in the region, depending on grade and location.

California: Potash pricing was steady at $227-$233/st FOB the warehouse. Potassium nitrate was $485/st FOB for bulk and $540/st FOB for 50-pound bags; sulfate of potash (SOP) was unchanged at $343-$348/st FOB for granular and $331-$336/st FOB on standard/soluble.

Agrium’s fuel surcharge moved on Aug. 8 to 24.5 percent in California and Nevada.

Pacific Northwest: Potash remained at $210-$230/st DEL, depending on grade and location, with the low reported in southern Idaho. Agrium’s fuel surcharge increased on Aug. 8 to 24.5 percent in the Pacific Northwest region.

Western Canada: Potash at the mine FOB Saskatchewan remained at $245-$250/mt FOB, depending on grade, with coarse potash quoted at $242-$257/mt FOB plant sites or regional warehouses in the region.

SULFUR

Tampa: The weather in the Gulf shows no signs of tropical storms, let alone hurricanes, and refineries were in good shape, except for BP’s in Texas City. Transportation was in good shape. The world market makes it less attractive for refiners to turn molten into pellets, so supply and demand were said to be pretty much in balance last week. Freight rates were the biggest problem for the world market. All of the lack of activity or problems will probably result in another price decrease for the fourth quarter, probably about $3/lt.

U.S. imports were up 23 percent in June, to 162,575 st from the year-ago 132,229 st. For the fertilizer year ending in June, imports were up 54 percent, to 2.2 million st from the year-ago 1.4 million st. Most of the increase for the year was from Canada, though tonnage from Venezuela was also up.

MARKET NOTES

India: Oil and Natural Gas Corp (ONGC) will restart its flood-hit Hazira gas plant in Gujarat on Aug. 19, two days ahead of schedule, to avert a fuel supply crisis, particularly for CNG operations in New Delhi. “The situation is better than anticipated. We think we will be able to restart the Hazira gas processing complex earlier than the scheduled date. We are hoping the plant may come alive on Aug. 18th,” said the ONGC chairman and managing director visiting the marooned facility. The plant will be restarted in phases, beginning with 6MMSCMD. The shutdown of the plant, which received 40.5MMSCMD from ONGC’s Bassein and B-55 fields and ONGC Reliance-BG operated Panna/Mukta and Tapti fields, cost ONGC Rs 210mn in revenues and Rs 160-170mn in profits per day. This shutdown has resulted in estimated losses of about 250-300,000 mt of urea production.

Even before the flooding issue, Brahmaputra Valley Fertilizers Corp. Ltd. (BVFCL) was faced with cuts in gas supply and requested OIL (Oil India Ltd) to maintain a steady supply of the contractual quantity of 1.72 MMSCMD of natural gas to its Namrup fertilizer complex. The company claims to have been facing resultant production losses, cash losses, and failure of critical equipment because of fluctuating gas supplies. BVFCL claims that the gas supply from OIL is not steady and has been falling below the contractual quantity, leading to tripping and abrupt stoppage of its plants. Moreover, gas is wasted when a plant has to be re-started after trip-up. In June 2006 alone, start-ups led to a loss of about 4,196 mt of urea and financial losses of Rs 25.5mn. In a letter to OIL, BVFCL has also sought an increase in the supply of gas over and above the contractual level, so as to run the plants at a higher load.

Barring damage to some crops due to persistent heavy rains and floods in parts of Maharashtra, Gujarat, and Andhra Pradesh, the ongoing spell of rains has largely been a boon for the farm sector in the country. Sowing of almost all crops is in full swing in all states. The moisture stress on the early-planted crops in the rain-fed tracts of northwestern and central India due to a couple of weak phases of the monsoon in the past is reported to be over, and the crops are now thriving.