IFA '08: Soaring feedstock challenges SOP market

19 May 2008 12:46  [Source: ICIS news]

VIENNA (ICIS news)--The rising price and tight supply of feedstocks is presenting the sulphate of potash (SOP) market with a major challenge and consumption could fall as a result, a producer said on Monday.

 

The rapid rise of key feedstock muriate of potash (MOP) and also other raw materials such as sulphur was putting pressure on SOP producers to increase their prices, the major producer added on the sidelines of the 76th International Fertilizer Industry Association conference.

 

“We are trying to price our material responsibly,” said the producer. “Most of our clients are not benefiting from the increased price of biofuels.”

 

MOP prices have risen dramatically this year on the back of an imbalance in supply and demand, illustrated by the recent Indian and Chinese contract settlements, which were agreed at a $355/tonne and $400/tonne increase respectively.

 

The SOP producer added that availability was also a key factor, with some MOP producers now reluctant to offer long-term supply contracts.

 

“We are at the mercy of the MOP producers,” said the SOP producer. “The major issue is not price it is mainly to secure the amount of MOP we need. In some cases, price is secondary.”

 

With supply/demand of MOP unlikely to improve in the short to medium term, the challenge will remain for SOP producers.

 

“If [SOP] prices continue to increase people will use less SOP,” the producer said.

 

SOP is commonly used as a fertilizer for fruit and vegetable produce.

 

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By: Carl Roache
+44 20 8652 3214

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