US DAP supplier PhosChem not discounting prices to India

30 November 2011 15:43  [Source: ICIS news]

LONDON (ICIS)--US phosphate fertilizer supplier PhosChem is not discounting the contract price of diammonium phosphate (DAP) to India, the company said on Wednesday.

PhosChem – which has a three-year contract to export 2m tonne/yr of DAP to India – was responding to the move by Russian producer PhosAgro to lower the price of contract DAP cargoes to Indian buyers.

The Indian Farmers Fertiliser Co-operative Ltd (IFFCO) had called for the prices of imported fertilizers to be reduced last week, as the rupee tumbled against the US dollar.

IFFCO asked for a $50/tonne (€37.50/tonne) reduction for DAP and $45/tonne for nitrogen-phosphate-potassium (NPK) to ease rising retail prices for end users.

PhosAgro confirmed a discount on cargoes of DAP due to be shipped until March 2012 under a 1m tonne contract has been agreed.

IFFCO said the discount is $35/tonne, which would lower the established contract price of $677/tonne CFR (cost and freight) to $642/tonne CFR.

PhosAgro would not comment on the actual price reduction but the agreement commits IFFCO to buy additional cargoes of Russian DAP and grants the producer a seller’s option, allowing it to vary time of delivery and settlement on these shipments.

Exercising its seller’s option would take PhosAgro out of the market until April 2012.

The agreement has startled other major market players.

They have expressed concern that such actions could set a precedent and place extra downward pressure on the phosphates market, which is already at low ebb.

PhosChem said: “We are continuing to ship DAP to India according to existing contract terms and no price concessions are being made.”

Saudi Arabian supplier SABIC has also confirmed cargoes of DAP produced at the Ma’aden plant and bound for India under contract are currently invoiced at $677/tonne CFR.

Ma’aden is ramping up production rates to 70-80% in the first quarter of 2011 and output is expected to reach 3.2m tonne/yr at full capacity.


For more on DAP visit ICIS pricing fertilizers

By: Karen Thomas
+44 208 652 3214

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