India buys Tunisian DAP for first time

14 July 2008 11:47  [Source: ICIS news]

LONDON (ICIS news)--Indian phosphate fertilizer importers have purchased Tunisian diammonium phosphate (DAP) for the first time ever despite the country's reliance on North African phosphoric acid, a feedstock for phosphate fertilizers, a trader source said on Monday.

 

In a surprising move, the Indian Farmers’ Fertilizer Cooperative (IFFCO) bought 30,000 tonnes of DAP fertilizer from Groupe Chimique Tunisien (GCT) at $1,274.75/tonne (€803/tonne) CFR (cost and freight) for July shipment, the source said.

 

Two reasons for the change of strategy were highlighted by market sources. Firstly, IFFCO had never bought phosphoric acid from GCT prior to this sale therefore traders deemed there was no fundamental conflict of interest.

 

Secondly, slow demand in Turkey (a traditional outlet for Tunisian DAP in July-September) had meant that GCT had more tonnes available. Sources at GCT were unavailable to confirm these reports, however.

 

India imported 2.3m tonnes P2O5 of phosphoric acid in 2007, the majority of it (57%) sourced from Moroccan and Tunisian producers. Traditionally, these producers, who also supply finished phosphate fertilizers globally, have refrained from selling DAP to India as it would reduce demand for phosphoric acid used by domestic fertilizer producers.

 

Traders were unsure whether this sale was a one-off or represented the start of a more long-term arrangement between IFFCO and GCT.

 

($1 = €0.63)


By: Mike Nash
+44 20 8652 3214



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