All Posts from July 13, 2009

Market Watch

AMMONIA

U.S. Gulf/Tampa: No big changes are expected until August business is conducted for Tampa. For now, some speculate that NOLA ammonia and UAN prices may compete well with urea, which has firmed in recent weeks.

Eastern Cornbelt: Sources reported a firming ammonia market last week. “There has been a lot of ammonia bought for fall,” said one source. “Most suppliers have taken the max amount they can deliver during that fall window, so are effectively sold out of fall prepay.” Added another source, “A lot of people have gone from long to short, with a lot of tons sold.”

As a result, sources placed the spot market at the $320-$340/st FOB level out of regional terminals last week, depending on location and supplier, although some locations were out of product. Koch’s July 6 ammonia postings included $320/st FOB terminals in Illinois and Indiana, and another supplier was referencing forward contract ammonia for August at $350-$355/st FOB in the region. One source speculated that fall prepay might still be on the table at the $350/st FOB mark, but that was not confirmed. Still others said cash market reference pricing could be as high as $400/st FOB if certain locations actually had spot tons to sell.

Western Cornbelt: The ammonia market was pegged at $310-$320/st FOB regional terminals to the dealer, indicating a slight uptick from last report. Sources said lots of fall prepay has been booked, and most suppliers had withdrawn their prepay programs as a result. A Missouri source placed the ammonia market at $240-$260/st FOB production points in Oklahoma, Texas, and Kansas, depending on time of delivery, with roughly $60-$70/st freight to central Missouri locations.

Koch reportedly moved its ammonia posting up on July 6 to $320/st FOB Hermann, Mo. Another supplier was referencing forward contract ammonia for August at $325/st FOB in Nebraska, $335/st FOB in Iowa, and $355/st FOB in Missouri.

California: Effective June 26, Calamco lowered its ammonia price in California from $390/st to $300/st truck-DEL. Rail-delivered ammonia moved on that date to $335/st, while Calamco’s aqua ammonia posting dropped from $108/st to $90/st FOB in California.

Pacific Northwest: The anhydrous ammonia market was pegged at $350-$360/st rail-DEL in the region. One supplier was referencing forward contract ammonia for August at $360/st FOB in Washington, with aqua ammonia posted at the $92.50/st FOB mark for August.

Agrium’s July 1 anhydrous ammonia postings included $405/st rail-DEL in Oregon, Washington, and northern Idaho; $425/st truck-DEL in northern Idaho and in Oregon and Washington east of the Cascades; $430/st rail-DEL in southern Idaho and Utah; and $455/st truck-DEL in Montana and northern Wyoming. Also effective July 1, Agrium’s aqua ammonia postings moved to $104/st FOB Central Ferry and Finley, Wash.

Western Canada: The anhydrous ammonia market was quoted at $595-$640/mt DEL in the region. Unstable weather settled over much of the region last week, with severe weather watches posted for central Saskatchewan at midweek and numerous thunderstorms reported in central Alberta. The system brought moisture to many areas that had been abnormally dry in June.

Black Sea: Reports are beginning to circulate that more ships are heading to Yuzhnyy for loading. At the same time, sources report at least one sale at $200/mt FOB. The combination of more vessels and a rumored deal at higher levels brought some joy to observers, who were hoping the market would begin to turn around.

If the $200/mt FOB deal turns out to be real, sources say it could signal the beginning of a turnaround in the market. Asian sources were unable to name the buyer or the cargo’s destination. One source said the rumor has the aroma of producers wanting to move the market out of its doldrums.

With prices stuck in the $180-$190s/mt FOB for weeks and with most plants in the area shut down because the market price cannot support the price of raw materials, sources say any upward tick is a welcome relief.

Demand from the usual buyers from the area – Western Europe and the U.S. – has been weak as they either scaled back their purchases or have found other sources in recent months, leaving Black Sea producers with fewer clients.

Middle East: Reports began circulating just as the month opened that a new low price was struck in a spot deal. By last week, sources confirmed that Sabic sold a cargo to Kissan in India for $180/mt FOB.

Producers had been holding onto prices from the last bit of contract business that kept the area price in the low $200s/mt FOB as their base for any deals. Now, it appears that Sabic broke that hold. One Asian source opined that Sabic had to have been in desperate shape to agree to a low-cost spot deal with a company that is known for advertising every discount it gets.

Traditionally, the contract deals are lower than spot purchases. In the absence of other business, these deals have set the price. Spot buyers were always aware they would have to pay a few more dollars than the contract price.

This time, however, Kissan seems to have been able to snag a good deal.

The move on prices in the area comes just as the Black Sea seems to be stabilizing and possibly moving up.

Even if Kissan could get a deal at $180/mt FOB, sources say they doubt if anyone else walking in will be able to get a similar deal. With the deal in hand, sources peg the market at $180-$200/mt FOB.

Asia: MITCO seems to have most of its problems solved. The Malaysian producer is loading a cargo for IFFCO/India under its contract arrangement. The plant had been down because of problems with its natural gas pipeline. Sources say most of the problems have been solved, but occasional hiccups continue in the process. The plant should be back up to full capacity production in another week or so.

Taiwan buying continues at a strong clip. Sources say Transammonia even moved an additional cargo into Kaohsiung for CPDC late last month.

Namhae in South Korea remains the only downside to the ammonia market. The fertilizer giant reduced its ammonia intake after the Seoul government announced earlier this year that it would no longer provide North Korea with free fertilizer until the Pyongyang government returned to the six-party talks.

The other buyers in South Korea are not only taking all their contracts call for, but also are requesting extra tons from their suppliers. So far, all requests are being handled without problem.

Sources say the East Asian market is expected to remain strong through August.

UREA

U.S. Gulf: Urea barge prices continued to strengthen last week. Earlier in the week, most sources were putting them in the $255-$260/st FOB range; however, by late Thursday came word that $265/st FOB had been achieved. Others had argued that $260-$265/st were August numbers, not prompt. However, strong rice demand and a low number of barges at NOLA prodded the market upward. In addition, at least one large importer was reported to have bought up NOLA barges as an easy alternative to more near-term imports. Most said finding any available barges at NOLA right now is a very hard task.

Sources reported that CF has now posted August at $270/st, September at $275/st, and fourth quarter at $285/st FOB.

Another topic of agreement was the supply chain; sources generally agreed that urea inventories overall have been depleted and that buyers will need to stock up. However, most also fear that the stocking up will be hand-to-mouth, as buyers will be afraid of buying too much product ahead, preferring to pay the “market” and pass that along to their buyers, rather than lose money on speculation as they did during the season just past.

Industry players were divided over the near-term future of the market. Bears said that the market may start to crater around the time of the Southwestern Fertilizer Conference, as rice demand will start to wane. They also surmised that more imports will be on the way and that current price levels may begin to attract stray cargoes, even from China. In addition, they were very worried about corn prices. They said sub-$4.00 corn has many depressed and not too anxious to spend money.

Market bulls disagreed, saying current prices are not enough to attract stray vessels. They also say that wheat demand will be there to pick up the slack once rice demand starts to tail off. On the other hand, noted a few sources, ammonia and UAN are attractive right now versus urea on a nitrogen content basis. They say those buyers that can switch between the products may choose the cheaper option.

Eastern Cornbelt: The urea market was steady at $275-$295/st FOB regional terminals for prompt tons.

Western Cornbelt: Granular urea remained at $275-$295/st FOB in the region, although most locations were reportedly in the $275-$280/st FOB range for dealer pricing last week. Sources pegged the Catoosa/Inola market in Oklahoma at the $280/st FOB level as well. One southern Missouri source said growers were between applications on rice.

California: Granular urea was unchanged at $330-$350/st rail-DEL and $360-$380/st FOB in the state.

Pacific Northwest: The granular urea market was pegged at $300-$330/st DEL in the region, depending on location, but sources reported few new sales to test the market.

Western Canada: Granular urea pricing remained at $425-$450/mt DEL to the dealer.

Pakistan: After a flurry of activity of calling tenders, moving up the closing dates, and increasing the quantities being requested, TCP has so far awarded only 85,000 mt in three tenders. The awards come from the June 27 and 30 tenders. As Green Markets went to press, TCP had not yet issued any awards in the tender that closed July 4.

The first award of 25,000 mt went to Hagrapota at $276/mt CFR from the June 27 tender. The second set of awards from the June 30 tender went for $281.75/mt CFR to Transammonia for 25,000 mt and Transfert for 35,000 mt.

The most recent tender had firm offers for 345,000 mt and 190,000 in seller’s options. The prices were higher than the previous tenders by as much as $6.25/mt.

One offer, from Al-Falah, set off warning alarms with the buyer because the offer of $276/mt CFR was far below what was offered in the most recent tenders as well as the July 4 one. TCP called all the offering companies in for a talk July 7 to see if any of them would be willing to match the awards from the second tender at $281/mt CFR. Sources say there was no movement. Attempts to get buyers to match the second lowest offer of $287.90/mt CFR by Transammonia also failed.

Results of the tender follow.

The TCP website still identifies four more tenders to go for 50,000 mt each. The problem for some industry observers is keeping track of each of the tenders. Some were moved up and some were scrapped. The TCP website is also not always up to date.

Based on the site, three tenders of 50,000 mt each close July 11 – although sources have said these tenders were combined into the one for 100,000 mt that closed July 4.

Another tender called June 30 closes July 14.

Pakistan media report the country needs 300,000 mt additional tons to properly cover the upcoming application season.

Some traders in the area say the 300,000 mt is needed more as a security blanket rather than for immediate use. Others say some of the tons will need to go from port to field immediately, while the majority of the tonnage will go into buffer stocks.

Pressure from local politicians on the central government raised the issue of possible spot shortages in the country. The government took the unprecedented action of allowing private companies to import urea if TCP could not or would not.

TCP has been facing financial troubles, according to area media. Commercial banks have been reluctant to honor letters of credit from TCP because it has gone beyond its credit limits with many of the banks in tenders for other commodities.

The central government has had to step in to convince the banks to honor the LCs. Sources say the talks are continuing.

The slow transportation of imported urea from Gwadar Port to inland locations has caused some concern. According to the local media, the provincial government of Punjab, in a letter to the federal government, has sought timely transportation of urea from the port. It said imported urea is piling up at the port, with a possible negative impact to crops. However, NFML Managing Director Mian Ejaz rejected the claim, saying out of a total of 177,000 mt of fertilizer imported, some 130,000 mt has been loaded, with the rest to be transported as soon as possible.

India: The industry was abuzz with rumors that STC was preparing documents for a tender. Sources say a tender could be called as early as this week or as late as the end of the month. The tender will have to be called soon to ensure the greatest competition among sources to help drive down prices, said one trader.

If the Indians wait too long to issue the tender, a trader said, the shipping date could be pushed beyond the Sept. 15 deadline for lower-cost Chinese product. If the tender comes down to only a battle between the Middle East and the Black Sea, said one source, there would be little incentive for the two supplying sides to lower prices.

Only with China in does the pressure on producers get intense, said another source.

The STC tender is not expected to specify how many tons the company wants. Sources say India still needs 500-700,000 mt for the application season.

Working on the Indians’ side are the late rains. Because the monsoon season started late, sources say the applications of fertilizers will also be delayed. The delays can help the buyers hold off until the last minute, and thereby put pressure on producers to lower prices to reduce their inventories.

China: Just as the export duty came down to 10 percent to encourage exports, the cost of getting material from the factory to the port went up. Sources say the new directive increases the rail cost of shipping urea by 55 percent, which adds another $5-$6/mt to the cost of the urea. With prices currently pegged at $260/mt FOB, the new price at the port could take it to $265/mt FOB and up.

With $30/mt freight estimated to India, sources say the Middle East price will have to come up for the Chinese tons to be competitive. And the Middle East suppliers are arguing for higher prices, but so far without much luck.

One observer of the Chinese market noted the reduction of the export duty from 110 to 10 percent and the increase in the rail fees were most likely done by different ministries with different agendas.

A source said he was not sure just how many Chinese tons would be available for the global market. He added that he does not think the Chinese planners have an idea, either.

Black Sea: Offers in the TCP/Pakistan tenders were dominated by Black Sea tons. So far, only 85,000 mt have been awarded out of nearly 1 million mt offered in all three tenders.

Freight to Southeast Asia remains the big issue for supplies from the Black Sea. Ships taking the quick route through the Suez Canal must also pass through the pirate-infested waters of the Gulf of Aden. Efforts to avoid that area require the ships to take the long route around Africa. In both cases, the cost of the passage is more expensive.

Some ship owners are holding firm that they do not want their vessels passing through the Gulf of Aden. Others are willing to take the chance, but only with very high rates.

The bottom line of the higher shipping rates is that Black Sea producers have to accept lower netbacks to compete against the Middle East and Chinese suppliers.

With some orders well in hand and an Indian buyer waiting in the wings, sources say producers in the area are now arguing for higher prices.

The latest offer is reportedly $250/mt FOB.

No one has accepted that amount, but the market now has an indication of where producers would like to go in the next set of Indian, Pakistani, and Latin American buying.

Until either TCP issues awards in its most recent tender or a firm spot deal is done, sources say the market in the area remains in the upper $230s/mt FOB.

Middle East: Producers are comfortable into August thanks to the previous set of Indian tenders. With another Indian tender looming, sources say the producers have no incentive to lower their expectations on pricing. Reportedly, talks with producers indicate starting offers at $265/mt FOB.

While not as dramatic a jump in price as what the Black Sea producers are asking – $235/mt FOB to $250/mt FOB – it is a move that many think could set a new price plateau.

A lot will depend on what STC is willing to pay when it calls its tender later this month. If the buyer digs in its heels and demands at least the same price paid by MMTC last month, the producers may not get the jump they want.

In the end, said one source, the talks between STC and the producers will be another game of chicken to see who can hold out longer – the buyer that needs tons, or the producer that risks rising inventories once the last shipments from the previous tenders are sent out.

Indonesia: PIM closed a selling tender Friday, July 10. The government waited in granting the export permits until after the elections securely returned the president to office. Sources said the tender was delayed to ensure the opposition parties could not use the sale as a way to scare farmers that a urea shortage was being engineered by the executive branch.

Sources say the final sale will most likely only be 20,000 mt. Earlier area traders were speculating that the sale, once announced, could be for as much as 40,000 mt.

NITROGEN SOLUTIONS

U.S. Gulf: While some sources were still calling the market $125-$130/st FOB, a larger contingent was putting it at a flat $130/st FOB. Although one source said he couldn’t find barges below $130/st, another said none had traded above $130/st FOB. Others said new quotes were $135/st FOB and moving in that direction. Producers have reportedly moved August-September postings to $140/st FOB.

Eastern Cornbelt: The UAN-32 market was tagged at $5.35-$5.78/unit FOB regional terminals to the dealer, with forward contract tons for August-September referenced at $174.40-$190.40/st ($5.45-$5.95/unit) FOB range in the region.

Western Cornbelt: The UAN-32 cash market was quoted at $165-$185/st ($5.16-$5.78/unit) FOB regional terminals, depending on location, with several sources placing the common dealer market in the $5.50-$5.63/unit FOB range for prompt tons last week.

California: Rail-delivered UAN-32 remained at $195-$200/st ($6.09-$6.25/unit) in California, while the truck market was down slightly from last report at $200-$210/st ($6.25-$6.56/unit) FOB in the state. One source said that market may have bottomed as inventories get cleaned up, and prices might start edging upward.

Pacific Northwest: Washington sources reported some movement of liquid fertilizer through irrigation systems. The UAN-32 market was quoted at $225-$235/st ($7.03-$7.34/unit) DEL in the region, up slightly from last report. Effective July 1, Agrium’s UAN-32 postings moved to $240/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County; $245/st rail-DEL and $250/st truck-DEL in southern Idaho, Nevada, Utah, and Oregon’s Malheur County; and $260/st DEL in Montana and northern Wyoming. Agrium’s UAN-28 postings moved on that date to $228/st DEL in Montana and northern Wyoming.

Western Canada: The UAN-28 market was tagged at $271-$287/mt ($9.68-$10.25/unit) DEL in the region.

AMMONIUM NITRATE

U.S. Gulf: Players are now calling the market $200-$220/st FOB based on recent sales of large quantities.

Western Cornbelt: Ammonium nitrate remained at a nominal $265-$270/st FOB in the region. The Catoosa market was pegged at the $255/st FOB level.

California: No market was reported for ammonium nitrate in the region. CAN-17 was steady at $235-$245/st FOB in California.

Pacific Northwest: Ammonium nitrate was unchanged at $335-$350/st DEL in the region for the last completed business. CAN-17 was steady as well at $245-$250/st FOB and $260/st DEL in the region.

AMMONIUM SULFATE

Eastern Cornbelt: Sources confirmed that Honeywell was out in early July with a summer fill program for granular ammonium sulfate at $125/st FOB or DEL in the Midwest, but the program was reportedly short-lived, with several sources claiming no new orders could be placed at that level by July 6. “As soon as they put it out there, they pulled it,” said one. “It’s a dirt cheap price, but there’s nothing available.” As a result, sources pegged the dealer market at the previous level of $225/st FOB for any available tons last week, with some sources speculating that Honeywell would release an updated price sheet in the near term.

Western Cornbelt: Granular ammonium sulfate was tagged at $225/st FOB in the region.

California: Ammonium sulfate was steady at $235-$272/st FOB in the state, with the low end for standard grade and the upper end for granular product in desert locations.

Pacific Northwest: Granular ammonium sulfate remained at $225-$230/st DEL in the region.

Western Canada: Granular ammonium sulfate pricing was steady at $300-$305/mt DEL in Western Canada to the dealer.

Southern Plains: Ammonium sulfate postings from American Plant Food Corp. dropped roughly $40/st on July 6. New reference levels in Texas include granular ammonium sulfate at $150/st FOB Freeport, $160/st FOB Galena Park, $175/st FOB Fort Worth, and $190/st FOB Littlefield; coarse grade at $140/st FOB Freeport, $150/st FOB Galena Park, $165/st FOB Fort Worth, and $180/st FOB Littlefield; standard grade at $135/st FOB Freeport and $175/st FOB Littlefield; and N-Pac Compacted at $165/st FOB Galena Park.

PHOSPHATE

Central Florida: Last week many said they were waiting for the Southwestern Fertilizer Conference before making a decision.

Are buyers are just waiting for low prices and stability, as some have said? Maybe, but that’s been the case for a while. Prices are very reasonable, say some sources, and don’t show any indication of movement, either up or down, to any large degree. In many past years, the Southwest Conference has acted as a trigger to kick off the fall season, but only time will tell if it is the catalyst this year. Other times folks just go there to talk and kick tires and don’t really do any business, but go home and think about it.

Sales were done last week out of Central Florida, but all fell within the previous week’s range. After CF kicked its price up $10/st FOB, resellers who deal with them said they would have to charge $265/st FOB, but that business has been slow to come.

The Central Florida DAP price range was unchanged last week at $250-$260/st FOB. PCS Sales had no published price. Mosaic had no list prices for Central Florida, but was making sales within the current price range. CF’s price for DAP was $260/st FOB and $10/st FOB more for MAP. Agrifos was no longer posting prices, but was charging based on market conditions.

U.S. Gulf: The USDA’s updated estimate of corn acres, now 87 million acres, continued to take its toll last week as corn prices continued to tumble, down well below $3.50/bushel. Oddly, stock prices for fertilizer companies began to rise late last week, and some thought that was a bright spot and corn prices would soon follow, along with phosphate sales.

That didn’t happen last week. Sales were made, but nothing was above the previous week’s range. Sources said offers were pretty uniform at $265/st FOB and a few lower but, as of late last week, no one actually bought or sold at the higher figure. One trader said that phosphate had been the “single, worst product this season,” which was hardly a ringing endorsement. After phosphate’s bottom fell off a cliff a year ago last summer, sales on the Gulf’s river system have been treading water and trying to reach a lifeboat, which has managed to bobble just out of reach.

Hopefully, the old axiom that it will be a good year “if the corn is knee high by the Fourth of July” will hold true, because it seemed to be throughout the Cornbelt, some of it already beginning to tassel.

The Southwest Conference begins July 25, and predictions were buying will get underway before or during that time. If not, well, the fall season can always give way to the spring version, and then fall, and so on.

The NOLA DAP barge price range was stable at $260-$264/st FOB. Both Mosaic and CF had a $10/st FOB additional charge for MAP.

Eastern Cornbelt: The DAP market was steady at $295-$310/st FOB regional warehouses, with MAP $10/st higher. One supplier was referencing forward contract DAP for August at $305/st FOB Peoria and $310/st FOB Cincinnati. 10-34-0 remained at $400-$425/st FOB most regional shipping points, with very little new business to test the market.

Western Cornbelt: DAP pricing remained at $290-$310/st FOB warehouses to the dealer, with MAP $10/st higher. Forward contract DAP for August was referenced at $305/st FOB St. Louis from one supplier. 10-34-0 remained at $310-$370/st FOB in the region.

California: Effective June 26, Agrium’s MAP postings dropped to $360/st FOB warehouse or rail-DEL in California and Arizona. Simplot is also referenced at $360/st FOB or DEL for both DAP and MAP in California. Simplot’s posted price for 0-45-0 TSP is $388/st FOB French Camp or rail-DEL.

16-20-0 pricing had dropped as well to $265-$272/st FOB and $265/st rail-DEL in California. 10-34-0 pricing was down dramatically following the recent price adjustments on ammonia and phos acid. The 10-34-0 dealer market was quoted at $310-$330/st FOB, with the low in the Central Valley and the upper end at desert locations.

Simplot was referenced at $7.05/unit DEL for both super phosphoric acid and merchant grade acid in California for July, with a 25 cent/unit increase slated for August. Agrium also updated its phosphoric acid prices for July 1 to $705/st rail-DEL for SPA and MGA in California and Arizona. Agrium’s postings will firm to $730/st rail-DEL in those states effective Aug. 1.

Pacific Northwest: The DAP and MAP markets dropped to $345-$360/st FOB or DEL in the region following posting adjustments in late June. Simplot’s new postings took effect June 23, with DAP and MAP moving to $345-$360/st DEL, depending on location, and 16-20-0 to $255-$265/st DEL in the region. The company’s postings FOB Hopmere, Ore., moved to $350/st FOB for MAP and $255/st FOB for 16-20-0.

Simplot’s postings for dry phosphate products with Avail® moved to $428-$443/st DEL for MAP and $338-$348/st DEL for 16-20-0, depending on location. Postings for 0-45-0 TSP with Avail® moved to $383/st FOB Pocatello, Idaho, and $398/st FOB Hedges, Wash.

Effective June 26, Agrium’s MAP postings dropped to $345/st DEL in Montana and Wyoming; $350/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $350/st FOB warehouse and $355/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County.

Phosphoric acid was quoted at $7.05/unit DEL for both SPA and MGA in the region. Simplot moved to that level on July 1, with a 25 cent/unit increase slated for Aug. 1. Agrium also updated its phos acid prices for July to $705/st rail-DEL for SPA and MGA in Idaho, Montana, Nevada, Oregon, Utah, and Washington. Postings will firm to $730/st rail-DEL in those states effective Aug. 1.

The 10-34-0 market had reportedly dropped to $350/st FOB in the region, give or take.

Western Canada: MAP was quoted at $420-$455/mt DEL in the region.

U.S. Export: No export sales by PhosChem or other U.S. trading companies were found last week, although Pakistan issued a tender seeking unspecified tonnage, probably around 100,000 mt. However, that country issues far more tenders than it makes it buys, so excitement was restrained.

Latin America, particularly Brazil and Central America, continued to be seen as possible markets in the next few weeks.

With no new sales, the export DAP price was unchanged at $288-$290/mt FOB. Offers were being made in the range of $290-$300/mt FOB. Prices appear poised to rise slowly during the short term.

Argentina: The Mosaic Co. reports that on July 1 Mosaic de Argentina S.A. executed an offer to sell MAP and MES fertilizers to Cargill S.A.C.I. Product is to be sold at prices negotiated at the time of sale. The offer is effective until Aug. 31, 2010. Mosaic filed this information with the U.S. Securities and Exchange Commission since Cargill has majority ownership in Mosaic.

Bangladesh: BCIC has issued a tender to import 10,000 mt of phosphoric acid (P2O5: 52-54%) on a C&F Chittagong basis. Offers shall be received up to Aug. 3. and should remain valid for up to 30 days.

POTASH

Eastern Cornbelt: Potash remained at $580-$630/st FOB warehouses from brokers or resellers, depending on grade and location, with minimal new business to test the market. There was talk of a pending price adjustment coming from at least one domestic producer late in the week, but nothing official was confirmed by press time.

Western Cornbelt: The dealer market for potash remained at $580-$630/st FOB regional warehouses for brokered tons, depending on grade and location, with the upper end reported for white granular potash out of spot locations in Missouri.

California: Potash remained in the mid-$800s/st on an FOB or DEL basis in the region, with no new sales to test the market.

Sulfate of potash was pegged at $950-$1,020/st FOB for bulk tons, depending on grade and supplier. That range reflects a slight drop from last report.

Potassium nitrate pricing was also down from last report. Sources pegged the dealer market at $1,160-$1,230/st FOB, with the low for bulk and the upper end for bagged product. That range reflects a $150/st drop from last report, sources said.

Pacific Northwest: Delivered potash remained in a broad range at $750-$850/st in the region, depending on supplier and point of origin. “Growers are on strike,” said one source in regard to potash usage. “And what price is he willing to buy potash at? I’m not sure I know the answer to that.”

Western Canada: Potash FOB Saskatchewan mines was unchanged at $960-$1,000/mt FOB to Western Canadian customers.

Asia: Canpotex announced July 9 that it has concluded second-half 2009 contract business with a number of customers in both Korea and Taiwan at average equivalent delivered prices in the range of US$700/mt, depending on grade. This followed news from the prior week of similar prices with Japanese buyers.

Generally, sources say the $700/mt is a good $200/mt below year-ago levels achieved from these buyers. At the same time, sellers appear to be hoping to keep India and China at year-ago levels at least.

India: Initially, IPL had not made up its mind about issuing any awards on the MOP tender that closed last week. Sources say only a handful of companies participated, and that IPL was not happy with the offers. Talks broke down quickly after the tender was closed, with no one budging from their positions. Asian sources said in all likelihood the tender will be scrapped. Suppliers reportedly offered prices in the $625-$635/mt CFR range. Quantities offered were BPC 800,000 mt, ICL 800,000 mt, Canpotex 550,000 mt, APC 500,000 mt, and K+S 250,000 mt. The price and quantity offered by IPC was not known.

Literally as Green Markets went to the printer came word that IPL had settled with IPC Russia for some 850,000 mt at $460/mt CFR for July 2009-March 2010. GM will provide further details as they develop.

In other news, RCF has entered into a joint venture with National Mineral Development Corp. (NMDC) to explore possible potash reserves in the state of Rajasthan. NMDC is expected to study the available geological and other test reports, and advise on action, including the need of hiring a firm for further exploration. GM is seeking further confirmation and will provide more details as they develop.

SULFUR

Tampa: Negotiations between sulfur producers and the phosphate industry had not begun as of late last week, but it seemed probable the sides will sit down and talk at the upcoming Southwest Conference. Chances are that a settlement will be reached and about as good that the price will move little, if at all, in either direction. There has simply been too little change in supply or demand to warrant price movement.

MARKET NOTES

India: Fertilizer and Chemicals Minister M. K. Azhagiri recently unveiled a 100-day action plan. He said the fertilizer monitoring system would be upgraded to ensure timely availability of farm inputs to farmers. Responding to supply concerns from southern regions about shortages, he said there were no shortages and the supply to some of these states had even exceeded demand. For example, Andhra Pradesh had been provided with 618,000 mt of urea between April and June, compared with the demand of 300,000 mt. He said he had issued directions that subsidy disbursement should be done without any delay to provide relief to cash-starved units. The government controls the pricing of key fertilizers and offers funds to companies, called fertilizer subsidy, to compensate them for selling farm nutrients at the rates determined by the government. The fertilizer subsidy touched Rs. 1.1 trillion in 2008-09.

Azhagiri said the Ministry would approach the Cabinet Committee on Economic Affairs seeking an extension of the concession scheme for single super phosphate fertilizer. The scheme expired on June 30. Manufacturers are eligible for a maximum subsidy of Rs. 5,630/mt of SSP fertilizer instead of the Rs. 1,125/mt offered earlier. The 100-day agenda touches upon the revival of eight closed units of Hindustan Fertilizer Corp. and Fertilizer Corp. of India before Aug. 30. It also promises to prepare a road map to make sick units of Fertilizers and Chemicals Travancore and Madras Fertilizers financially viable. The Ministry has written to the Petroleum and Natural Gas Ministry expressing concern over the gas supply to fertilizer units.