DAP and MAP prices increase in Pakistan

20 March 2007 13:37  [Source: ICIS news]

LONDON (ICIS news)--Domestic list prices for diammonium phosphate (DAP) and monoammonium phosphate (MAP) have been increased in Pakistan.

 

The price hike came against a backdrop of rising international prices and with Islamabad yet to decide the rate of subsidies on imports of phosphates arriving from 1 January 2007 onwards, a senior official at Engro Chemicals said on Tuesday.

 

Engro raised the price for a 50kg bag of DAP by Pakistan rupees (PRs) 520/bag ($8.57/bag) to PRs1,322/bag ex-Karachi and for a 45.5kg bag of MAP, by PRs535/bag to PRs1,277/bag ex-Karachi, following its import of a 30,000/tonne DAP/MAP cargo on 10 March.

 

The new prices came into effect on Monday, with Engro saying the DAP price would cover an imported cost of around $400/tonne CFR (cost and freight) and allow for a margin.

 

The new price does not take into account a subsidy, although the Cabinet was reported to have approved on Monday to continue the subsidy scheme that was introduced on 1 October 2006.

 

However, the government has yet to make a decision on the subsidy rate for imports from 1 January 2007 and has not released funds to importers.

 

The subsidies for DAP and MAP imports in the fourth quarter of 2006 were set at PRs250/bag and PRs257/bag respectively.

 

Engro has asked the government to provide a subsidy of PRs520-550/bag to compensate for the higher cost of imports, which would allow prices for DAP to be reduced back to about PRs800/bag.

 

Import prices for DAP and MAP have increased by around $115/tonne since the start of this year, when prices were indicated at around $305/tonne CFR.

 

Last week, Fauji Fertilizer bought 25-30,000 tonnes of DAP at around $420/tonne CFR and prices were expected to continue rising on the back of tight global supply and strong demand in the international market.

 

Local sources were hopeful that the government would make a decision on subsidy rates for DAP and MAP by the end of this week.

 

($1 = PRs60.67)

By: Neil Griffiths
+44 20 8652 3214

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