05 June 2008 12:52 [Source: ICIS news]
LONDON (ICIS news)--The global phosphates fertilizer market is drifting sideways due to high prices and plentiful inventories in key markets, producer and trader sources said on Thursday.
Activity in the market was limited to additional purchases by India, which bought 47,000 tonnes of Russian monammonium phosphate (MAP) at prevailing prices of around $1,275-1,280/tonne (€829-832/tonne) CFR (cost and freight), eroding Russian Baltic and Black Sea netbacks by $30-100/tonne due to high freight.
Traders were bearish over the prospects for Latin American demand in the short term. North African producers confirmed the sale of around 50,000-55,000 tonnes of diammonium phosphate (DAP) and MAP there this week, but traders said they were struggling to raise interest for fresh cargoes at present.
In Argentina, the market was still in the throes of the farmers’ strike over export duties on some crops, with demand further subdued by a lack of moisture, sources said.
There were few other outlets for producers. Iran cancelled its phosphate tender due to uncertainties over its New Year budget while Turkey was yet to commit to imports from Tunisia. Sources expected Turkish import demand to be down by 50% on record high DAP prices and a lack of credit availability for farmers.
Even so the market remained short in the medium term, producers said, which gave them hope that prices would firm again.
Chinese producers still indicated that there would be no further DAP/MAP exports this year following the government’s decision to impose an additional 100% duty on exports to the end of the year, effectively banning exports.
This decision takes 2.5m tonnes of DAP/MAP out of the global supply chain in the second half of the year.
Producers said this would underpin prices, but the market hiatus looked set to continue for another month until Latin America returned, a clearer picture of the subsidy situation in Pakistan emerged and until India stepped in for an additional 600,000-700,000 tonnes of DAP for its rabi (winter) season.
($1 = €0.65)
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