All Posts from November 10, 2008

Market Watch

AMMONIA

U.S. Gulf/Tampa: No price changes were reported last week, though with crashing Black Sea prices, buyers must be anxious to begin negotiations for December Tampa imports.

PCS Sales will lose its ammonia tank lease at Savannah at the end of the year. As a result, the company is planning to truck ammonia to White Springs from Tampa, and rail ammonia to Aurora from its Lima, Ohio, production facility.

Eastern Cornbelt: Prepay ammonia was making its way to the field in some locations, but there was no spot business to speak of. “They’ve got roughly three more weeks, and then they’re on borrowed time,” said one source, in reference to what remains of the fall application season.

The ammonia market was quoted at $940-$980/st FOB for spot market tons, with the low out of river terminals in Illinois. While sources acknowledged these numbers as the “official” dealer market last week, suppliers indicated they were willing to take a look at any offer if it would spark some business. Dealers, however, were concerned about being long, and no one wants to carry over fall prepay tons into the spring 2009 season. One source reported rumors of spring prepay being offered in the $600s/st FOB, but that was not confirmed.

Western Cornbelt: The cash market for ammonia had reportedly dropped to $780/st FOB regional terminals on the low end, with no spot sales reported. There was still a lot of fall prepay tons to move, and sources acknowledged the narrowing application window due to the late harvest. One source said his company has moved only 10-12 percent of the fall prepay tons so far as growers concentrate on getting the corn and soybeans out of the field.

Southern Plains: Ammonia was moving to the field in some locations last week, but most sources described activity as very, very quiet. “I feel like I’m retired,” said one source. “We’re getting the flip side of fun.”

Although there were no sales to test the market, sources quoted ammonia in a very broad range at $490-$625/st FOB to the dealer. Those numbers were down dramatically from last report, with the low confirmed for spot tons out of regional production points and the upper end of the range reflecting the dealer price FOB regional pipeline terminals in Kansas. Sources noted that there is a significant amount of fall prepay to work through. No firm offers for spring prepay were reportedly on the table last week.

South Central: Most of the region sees little fall ammonia movement, so the terminal market was untested. Eyeing falling Tampa and Gulf numbers, however, one source said Mid-South terminal pricing is probably in the $550-$625/st FOB range or will be there soon, with absolutely nothing moving. Those numbers reflect a sharp drop from last report.

California: Effective Oct. 27, Calamco lowered its ammonia price in California to $825/st truck-DEL and $870/st rail-DEL. The company’s aqua ammonia price moved on that date to $216/st FOB in California.

Black Sea: The price keeps sliding, and sources dispute just how much further the area price can go. The argument is over the actual cost of producing ammonia in the area. One Asian trader calls the breakeven point at $350/mt, while another says the cost is $100 lower. The bottom line is that the producers really have no choice. They must keep producing and keep selling.

When the Transammonia deal to IFFCO of a few weeks back is calculated to Yuzhnyy, sources say the price comes out to $250/mt FOB. Even with a favorable freight rate, the price is still below $300/mt FOB.

One trader noted that anyone approaching a producer for tons would not be able to get a similar price. The limited storage facilities at Yuzhnyy and the softening global market are causing the occasional fire sale. Trammo, this trader said, was able to take advantage of the need to move tons and move them quickly.

Another source noted that until Asia, the U.S., and Europe step up their demand, such fire sales might become a monthly event. For now, sources put the Yuzhnyy market at $270-$290/mt FOB.

Middle East: Producers face increased supply and dwindling demand. Many Asian buyers are putting off purchases until they clear out their inventories. The global credit crunch has played havoc with a number of industries in Asia. Producers are not able to sell their products as readily. These buyers of ammonia have shifted from pushing back on higher prices – as they did just a couple of months ago – to full-scale cancellations of orders. Several companies in Taiwan and South Korea have shut down their facilities until the economic situation improves.

To add to the grief of the area producers, the Indian buyers – normally the mainstay of Middle East suppliers – are also cutting back on their purchases or looking elsewhere for cheaper material.

Prices under discussion by producers are now around $310/mt FOB, with buyers saying deals could be done at $300/mt FOB.

Time is on the side of buyers. The longer they hold off, the more the inventories build in the already-limited facilities in the Arab Gulf.

Add to the decreased demand the increased production that comes from the new Omani plant.

All in all, prices are down dramatically. The last public bit of business from the area was in the low $900s/mt FOB, and there appears to be little on the horizon to turn the market around.

Asia: Despite the planned shutdowns of KPI and KPA later this month and the ongoing closure of the Burrup facility, the Asian market is softening.

Demand is coming off because of the downturn in the global economy. Industrial buyers who once paid any price for ammonia so they could keep their plants running are now shutting down their factories until more secure economic times are apparent.

Sources say KPI will close in mid-November and stay down until the rest of the year. KPA will also close around Nov. 15, but for only 20-25 days.

What shipments are being made are enjoying lower fuel costs. The prices of the vessel fixtures have long been established for the area, as most deals are on a contract basis rather than spot. Savings for the buyers are coming with the dramatic drop in bunker price.

UREA

U.S. Gulf: Granular barge trades were reported last week within the $300-$310/st FOB range, with most sources putting the market toward the lower end of the range. Sources were happy that at least urea barges were moving and were seeing some interest from buyers.

Galveston: CHS has finished the necessary repairs to allow it to bring vessels into its Galveston terminal the week of Oct. 20. As a result, it has resumed all normal inbound and outbound shipments.

Eastern Cornbelt: Granular urea was pegged at $365-$425/st FOB regional terminals to the dealer, with the low again in Illinois. One source commented that while there are certainly price inquiries being fielded, no one has room for prompt tons.

Western Cornbelt: Granular urea to the dealer was quoted at $365-$390/st FOB for prompt quotes, with reports of forward tons sold at the $425/st FOB level. Those levels reflected another price reduction from last report.

Southern Plains: The granular urea market was tagged at $350-$360/st FOB the Tulsa market, which was down again from last report

South Central: Granular urea pricing continued to slip, although prompt business was extremely limited. Sources pegged the terminal market at $375-$390/st FOB to the dealer, with some reports of spring prepay sales being made over the last few weeks.

Southeast: The fertilizer markets were very quiet in the region, although sources continued to quote lower terminal prices based on much lower replacement costs. The urea market was tagged at $400-$440/st FOB port terminals, with most sources reporting the common dealer price at the $410/st FOB mark, give or take.

India: The STC tender closed Nov. 3 with prices seriously lower. The buyer pushed Middle East prices down $100/mt and the Black Sea about $80/mt.

More than 800,000 mt were offered when the tender closed. The initial prices showed the desperation in the Middle East producers when they came down from the $345-$347/mt FOB level of the last tender to $245-$247/mt FOB in this one.

And yet STC was not satisfied.

After a round of talks, the Middle East producers came down a few dollars. Havi changed its offer from a delivered to an FOB basis, and Toepfer came down about $10/mt.

Talks continued with Eurochem and Swiss Singapore, but no agreements were announced as Green Markets went to press.

If STC reaches a deal with Eurochem and Swiss Singapore, the total take from the tender could reach more than 600,000 mt.

Industry observers noted that several major trading houses did not participate in the tender. Some reportedly stayed out because of the volatility of the market, but others – so say their competitors – stayed out because of the fear STC could walk away from the deal if the prices continue to fall.

The lack of confidence comes from a move by IPL last month to drop a few cargoes from an earlier high-priced tender, leaving the providers with no place to send their product. Eventually, said sources, the cargoes were sold at a loss.

Sources expect to see another tender soon.

The STC purchases leave India about 300,000 mt short of their needs for the rest of the fiscal year. Sources say another tender could be called as early as the end of this month.

Pakistan: In a move that will most likely provide some support to Middle East prices, TCP called a tender for 100,000 mt to close Nov. 15. The tender was originally scheduled to close Nov. 10. Sources say this tender is the first of three to be called by the end of the year.

Thanks to aid-assistance packages from Saudi Arabia, Pakistan has been able to get by without going to the open international market for its urea for the past two years. The absence of TCP in the public market did little to stem the rising price of urea. Sources point to the regular shipments of urea from Sabic to Pakistan as one reason the Middle East suppliers were able to play such hardball with other buyers, notably the Indians.

Sources say the two governments have not been able to reach an accord for urea deliveries under an aid package for the first part of 2009, so TCP was forced to step back into the global market. Local media accounts have reported on growing regional shortages in the country.

A producer representative said the government-to-government deal could still come through. If it does, what happens to the tender is up in the air. One observer noted that with prices as low as they are, TCP could take the material from the tender and then rely on the aid package for the rest of the urea needed for the next season.

Pakistan’s Foreign Minister, Shah Mehmood Qureshi, has requested that the Kuwait government provide export credit to Pakistan for the import of urea. He made this request last week while meeting with the Ambassador of Kuwait, Aziz Raheem Mazeed Aldehani.

Pakistan will require about 428,000 mt of imported urea to meet the shortfall during Rabi season 2008-09 (OctMarch). According to a report of the National Fertilizer Development Centre (NFDC), Rabi season 2008-09 started with an opening inventory of 62,000 mt of urea. Urea availability based on inventory and domestic production of 2,295,000 mt makes for a total supply of 2,482,000 mt. However, urea consumption during the coming Rabi season is estimated to be 2,910,000 mt. Hence, additional urea will be required to augment the supply, and must arrive up to mid-November – otherwise shortages may emerge, NFDC pointed out.

Middle East: The market keeps falling. Each day showed softer and softer prices. Just a month and a half ago, prices were in the mid-$800s/mt FOB. A month ago the price dropped to the low $700s/mt FOB. And now the awarded price range in the STC tender in India is $244-$246/mt FOB. A producer agent said he doesn’t recall ever seeing such a drop in such a short time.

Middle East producers are now saying their November and early December order books look healthy. They are claiming there is little reason for a continued slide in prices.

They point to at least one more Indian tender to come within the next three to six weeks. The first of three 100,000 mt tenders from Pakistan closes November 15. And BCIC issued a tender to close Nov. 17 for 100,000 mt of prills and 50,000 mt of granular urea.

Add to all that reports that Latin America and Australia have not yet bought their normal allotments of urea for the year.

And yet, some in the industry are still not sure the floor has been reached.

The delays in Latin American and Australian purchases have little to do with the prices, but rather the farmers’ ability or desire to buy.

Restricted credit, lower prices for their products, and questionable weather conditions have combined to make farmers hesitant to lay out money for fertilizers until they really need the product.

Producers also appear ready to keep running their plants despite the softening of demand outside India, Pakistan, and Bangladesh.

Black Sea: Producers are in a bind. Global demand is not as strong as it was just six months ago, and the area is heading into winter.

Observers note that the plants need to keep running during the winter to prevent damage to the facilities. Even with reduced output, reserves of urea are expected to continue to build.

Demand for product from Yuzhnyy is also down because of tightening credit for buyers, and because farmers are facing reduced income from their crops and are putting off buying material as long as possible.

The latest Indian tender pushed prices not seen since December 2004 – bordering $200/mt FOB.

Helping prop up the port-side price are lower freight rates. Using prices based on the STC tender, sources say the price range in the area is now $210-$220/mt FOB.

Freight from Yuzhnyy to India’s west coast that was once at $60-$70/mt FOB has now dropped to $30/mt FOB.

Some in the industry are not too concerned for the producers as they approach their production costs for urea. One trader noted that the producers have just come off three quarters of record high prices that outpaced increases in input costs. The bottom line, traders say, is for production to continue and get ready for the spring loadings next year.

Bangladesh: BCIC called a tender to close Nov. 17. The company is asking for offers on 100,000 mt of prills and 50,000 mt of granular.

Area sources are unanimous in their views that Bangladesh needs the tonnage; they disagree on whether BCIC will actually take all the tons.

Latin America: The Brazilian government announced that crop production will be down this year and next because of the high price of inputs, including fertilizers. Farmers throughout the region increasingly find it difficult to secure the necessary credit to buy inputs. The credit crunch they are facing is part of the global financial problem.

NITROGEN SOLUTIONS

U.S. Gulf: Price ideas have been falling for some time, though finding actual business has been a chore. Last week sources confirmed sub-$300/st FOB business.

Eastern Cornbelt: UAN was quoted in the $12.50-$13.65/unit range FOB regional terminals to the dealer, with no new business to test the market.

Western Cornbelt: The UAN market was quoted at a nominal $385-$425/st ($12.03-$13.28/unit) FOB regional terminals for cash tons, with no new sales to test the market. “There’s so much solution that needs to get to tanks, but it’s sitting on barges waiting to move,” said one source.

Southern Plains: UAN-32 prices reflected a significant drop from last report, with most sources quoting the regional market at $305-$335/st ($9.53-$10.47/unit) FOB terminals to the dealer. Sources said the low end of the range was coming from sellers who are dumping product to get out of long positions.

South Central: The UAN-32 market was also showing weakness, although new sales were few. Sources pegged the dealer price at $380-$420/st ($11.88-$13.13/unit) FOB regional terminals. The dealer market FOB Vicksburg, Miss., was tagged at the $395/st ($12.34/unit) level at midweek.

Southeast: UAN-32 was quoted at $400-$445/st ($12.50-$13.91/unit) FOB regional terminals, with the upper end reflecting reference pricing out of spot Georgia locations. Sources described the market as “very thinly traded.”

AMMONIUM NITRATE

U.S. Gulf: Speculation continues on the fate of AN barges. To date, however, word on new trades has been scant.

Western Cornbelt: Ammonium nitrate was reported at $500-$525/st FOB in the region, reflecting a slight drop from last report. Sources reported no movement.

Southern Plains: Ammonium nitrate was quoted at $495-$505/st FOB, with the low FOB Tulsa and the upper end to the dealer FOB St. Joseph, Mo. Those numbers also reflected a sizable drop from last report, although new sales were few and far between.

South Central: Ammonium nitrate was quoted at $500-$530/st FOB, reflecting a slight drop from last report. Sources reported a few sales taking place, and credited limited tons and high value inventory for keeping the market buoyed in early November.

Southeast: Ammonium nitrate continued to be quoted in the $540-$550/st range FOB Tampa based on the last done business. Suppliers noted that those numbers were “defying gravity a little” based on the falling urea price. One contact said he expects the lower numbers when buyers come back into the market for the January/February citrus application period.

AMMONIUM SULFATE

Eastern Cornbelt: Granular ammonium sulfate was reported at $200/st FOB and roughly $190-$200/st DEL in the region, depending on supplier.

Western Cornbelt: Granular ammonium sulfate remained at $200-$225/st FOB.

Southern Plains: The granular ammonium sulfate market was pegged at $250-$300/st FOB, down some $150/st from last report. Oct. 30 postings FOB Plainview, Texas, included granular ammonium sulfate at $300/st, coarse at $290.st and standard at $275/st.

American Plant Food Corp.’s Oct. 30 postings for granular ammonium sulfate in Texas dropped to $250/st FOB Freeport, $265/st FOB Galena Park, $280/st FOB Fort Worth, and $300/st FOB Littlefield. APF’s course grade postings moved on that date to $235/st FOB Freeport, $250/st FOB Galena Park, $265/st FOB Fort Worth, and $285/st FOB Littlefield, while standard grade postings dropped to $225/st FOB Freeport and $275/st FOB Littlefield. APF’s N-Pac Compacted posting moved on Oct. 30 to $270/st FOB Galena Park.

South Central: The ammonium sulfate market was something of an enigma in the region. According to Honeywell’s Oct. 20 postings, granular sulfate was referenced at $200/st rail-DEL and mid-grade at $180/st rail-DEL in western Kentucky and sections of Tennessee and Mississippi. In areas outside that delivery area, however, sources pegged the market at $350-$370/st FOB, with reports of Honeywell reference levels at the $335/st DEL mark to certain locations in the region.

Southeast: Based on new postings from producers, the granular ammonium sulfate market was quoted at $290-$300/st FOB, with the upper end FOB Augusta, Ga. Standard grade sulfate was referenced at the $250/st level FOB Augusta. Delivered granular sulfate pricing ranged from $335-$363/st in the region, with standard grade reported at $285-$310/st DEL. One source said they were planning to rail sulfate to their location from Kentucky due to a significantly lower pricing structure in the Midwest.

PHOSPHATES

Central Florida: With international demand running at the same rate of domestic, inventories were rapidly building in Central Florida last week. Considering the world’s total demand has been roughly zero in recent weeks, phosphate producers were taking the only logical action possible – curtailing production. CF stopped buying additional quantities of sulfuric acid to process DAP, which will result in a reduction of about 10,000 mt a month. In addition, PCS Sales reduced production of P205 at one of its plants at White Springs, although the amount of the curtailment was not available. Even producers in the West were said to be cutting back. All of that occurred after Mosaic announced earlier that it was curtailing its production between 500,000 and 1 million st. Even with all of that, inventories were likely to continue growing until at least the end of the year.

The big problem was farmers were just not buying fertilizers – and no one could blame them. Prices have been drifting south and there was fear that grain prices would be lower for next season’s crops, so they need lower fertilizer prices. Everyone knows that sooner or later farmers will have to buy – not just phosphates, but everything – so when that will happen was the big question. Traders generally think nothing much will happen until around the first of February, but producers were hoping for an earlier start date, about the first of December. However, the longer the wait before the start, the greater the ultimate need will be and the more limited the ability to move product to warehouses, because there are only a limited number of NOLA barges and unit trains available.

There were no new phosphate sales out of Central Florida last week, and that situation appeared likely to continue for at least another month. The Central Florida DAP price range last week remained at $765/st FOB, based on asking prices from the lowest priced producer, rather than actual sales, which have not existed for many weeks. The low was the CF price. Mosaic had no posted price for Central Florida. PCS Sales’s Central Florida reference price was unchanged at $1,070/st FOB for DAP. Last week, Agrifos was seeking $755/st FOB for trucks and $750/st FOB for rail shipments.

U.S. Gulf: Farmers in some areas of the Midwest were still harvesting crops but field preparation was hard to find last week, and nothing was on the move – either up or down – in the NOLA DAP barge market.

Even sales from warehouses were not significant enough to make anyone think a real market existed, and it will be at least a month before anything happens – and that may not be much. Texas will likely be the first to see movement, but that will probably not happen until after Thanksgiving, and normally not much does until January or later. Sooner or later – most probably later – farmers will buy, but what prices will be at that time is anyone’s guess. Probably lower.

Producers were cutting back on production, because inventories can only rise so high. If the stagnation continues much longer, curtailments may have to be increased to the point plants will simply shut down – and restarting takes time and money, which would only serve to push prices back up.

Offers were almost as hard to find as buys, which didn’t happen. One trader said he was offering at $675/st FOB and thought others were as low as $650/st FOB, but the picture remained fuzzy. Even product that was salvaged at Agrifos after being damaged by Hurricane Ike was said to be offered at $700/st FOB, but not moving. Nothing was solid enough to change a NOLA DAP barge price range.

Last week, the NOLA DAP barge range was unchanged at $700-$720/st FOB. The range was determined earlier by consensus of buyers and sellers making and receiving offers, rather than the normal use of actual trades. Mosaic had no posted price.

Eastern Cornbelt: The DAP market was quoted at $765-$800/st FOB regional warehouses to the dealer, with the low out of river locations and the upper numbers inland. MAP was $25/st higher than DAP at most locations, with one source quoting delivered MAP tons at the $794/st level for new sales offers last week. Those numbers reflected another sizable drop from the previous week, though new sales were all but nonexistent. “There is nothing going on,” said one source. “New sales are so few and far between, it’s unbelievable. I’ve never seen it this bad. There is no interest whatsoever.”

No current prices were reported for 10-34-0 in the region.

Western Cornbelt: Phosphate pricing continued to plummet. Fall movement of phosphate and potash was down dramatically, with one source speculating that usage cutbacks at the farm level could reduce volumes by some 50 percent for the 2009 crop. Add to that the fact that many dealer bins are full of potash and phosphates. “Everyone is full, and you can’t sell anymore product until something goes to the ground,” said one source. “There’s definitely going to be a lot of bleeding in this industry as soon as we go to selling this product.”

DAP was quoted at $750-$780/st FOB regional warehouses on the cash market, with MAP $20-$25/st higher. Sources reported no current pricing levels for 10-34-0, although much lower forward acid costs from some suppliers prompted talk last week that early 2009 could see willing 10-34-0 sellers at the $800/st FOB mark or lower in the region.

Southern Plains: Sources continued to talk of cutbacks in fall phosphate usage in the region, with some quantifying the reductions so far at more than 50-60 percent of normal. As for pricing, dealers pegged the DAP market at $735-$750/st FOB Catoosa, Okla., at midweek, with one noting that the price drops another $5-$10/st every time a sale is confirmed. That prompted some to speculate the market could drop to $725-$730/st FOB the port by the end of the week.

MAP was roughly $25/st higher than DAP. The 10-34-0 market in the region had reportedly slipped to $990-$1,000/st FOB, reflecting a big drop from last report.

South Central: Phosphate, which generally sees decent fall movement in some sections of the region, was very quiet last week. “There’s no movement to speak of; it just hasn’t happened,” said one source. On the pricing front, DAP and MAP continued to deteriorate. DAP was pegged at $750-$775/st FOB regional warehouses, with MAP roughly $25/st higher and TSP approximately $20/st lower. Out of the Vicksburg market, sources quoted DAP at $760/st FOB and MAP at $785/st FOB.

U.S. Export: Again, no new export phosphate sales were made last week and there was nothing on the horizon. Sources said India would still need another 1.5 million mt and Pakistan 800,000 mt, but no one had any idea when or even if they would act. Meanwhile, India was holding off on letters of credit to Tunisia and Morocco on its phosphoric acid contracts with them, and they were not about to deliver without getting paid. Tunisia was preparing to shut down.

It also appeared the two major South American customers, Brazil and Argentina, would not make a move before January, and no one else in the world was expressing any interest. Basically, export customers were doing the same as U.S. farmers – waiting and watching.

With no new sales, the export DAP price range remained at $1,013-$1,015/mt FOB, which was probably overly optimistic but based on the most recent sales.

Pakistan: The country has ample DAP supplies to meet requirements though December 2008 and no immediate import is required, according to Mr. S. Aamir Ahsan, Chief Financial Officer/GM Finance of Pakistan’s only DAP producer, Fauji Fertilizer Bin Qasim Ltd. (FFBL). He said about 700,000 to 800,000 mt of DAP (imported plus local production) is available in the country, and thereby no imports are needed during Rabi season. He added that the consumption and import of DAP in the country suffered during last six months due to the high price of DAP and a delay in subsidy allocation. But now DAP sales are picking up, mainly due to the government allocation of Rs. 27 billion up until December 2008 and necessary uses of DAP for wheat crops.

He said DAP prices did not fall internationally as compared to other fertilizers, mainly due to the high price of rock phosphate. However, he pointed out that now DAP prices are going down due to the international financial crunch and the slowdown in economies worldwide. As a result, he estimates that about 45 percent of the world’s DAP/MAP export capability has been shut down, equivalent to around 950,000 mt/month of product, plus over 300,000 mt/month P205 of phosphoric acid.

The FFBL’s net profitability, however, has been affected adversely by an unprecedented increase in financial charges, (due to the strict monitory policy of Central Bank of Pakistan) i.e., Rs. 1,904 million against Rs. 454 million in the year 2007. This includes Rs. 1,025 million on account of a foreign exchange loss over the import of phos acid, on the back of an approximately 30 percent devaluation of the rupee against the U.S. dollar during the last nine months. The company paid $264 million until Sept. 30, 2008, against $104 million until June 30, 2008, on the import of phosphoric acid.

The adverse factors stipulated above translated into a third-quarter loss of Rs. 174 million; as such, the company’s overall net profit for nine months (Jan-Sept 2008) reached Rs. 544 million against Rs. 1,545 million in 2007, i.e., a 65 percent decline over same period last year. He was of the view that had the government allowed the hedging of phosphoric acid, the plant would have avoided its losses.

POTASH

Eastern Cornbelt: Potash was reported at $850-$875/st FOB most regional warehouses, reflecting a slight drop from last report but with no new sales to test the market.

Western Cornbelt: Potash was quoted at $800-$860/st FOB regional warehouses, depending on grade and location, with the low reported out of spot locations in Iowa last week.

Southern Plains: The potash market was pegged at $825-$875/st FOB regional warehouses, with the mine price FOB Carlsbad, N.M., unchanged at $794/st for 60 percent standard, $800/st for 60 percent granular, $820/st for 62 percent standard, $823/st for 62 percent fine standard, and $826/st for 62 percent granular.

South Central: Potash was pegged at $830-$850/st FOB regional warehouses to the dealer.

Southeast: Carolina sources pegged the potash market at $850/st rail-DEL and roughly $875/st FOB out of the regional warehouse system. Those numbers reflected a considerable decrease from last report.

Japan: Canpotex said Nov. 6 that it has concluded new supply contracts with its Japanese contract customers covering shipments for the first half of 2009 at a price increase of U.S. $200-$220/mt (depending on grade) over current contract prices. The new contract price reflects an average equivalent delivered price to Japan of over $900/mt, according to Canpotex.

“While the world works its way through a financial crisis, the need for food is not slowing,” said Steve Dechka, Canpotex president and CEO. “This contract settlement demonstrates that our customers understand that potash remains in tight supply and fundamentals are very strong, despite the recent volatility in markets.”

SULFUR

Tampa: Phosphate producers last week were curtailing production and needed even less sulfur, so inventories on the Gulf Coast were rising rapidly. Only a limited amount can be prilled, but even then there was no international market to take the material. A sulfur source said the situation will only grow worse until the phosphate market begins to take off, which could be two or three months away. Sulfur, which was selling for over $600/lt, was looking like what it actually was – a waste product – but refineries cannot shut down.

Word that fourth-quarter sulfur prices had officially settled did not reach Green Markets last month until Friday, Oct. 24 at 5:54 p.m., well after the publication’s deadline. Green Markets traditionally waits on all major contracts to settle before reporting this contract price.