Fear of Argentina import rules prompts flurry of phosphate buying

16 January 2012 14:58  [Source: ICIS news]

LONDON (ICIS)--Imminent import regulations restricting further imports into Argentina have triggered a spate of phosphate fertilizer buying, market sources said on Monday.

Fertilizer cargoes could join the list of around 600 goods, which include BlackBerrys and laptops, which require government approval prior to importation.

The move to restrict imports was implemented last year in an effort to promote domestic industry and tackle Argentina’s high rates of inflation.

Although an official announcement has not yet been made, market sources say the regulations will apply to fertilizers from 1 February.

“The rules will oblige traders to register each order and the bureaucracy will lead to importing delays,” said a supplier.

Buyers were not expected to step back into the market to buy phosphate fertilizers until the end of January, as high levels of inventory have been carried over from the previous crop season.

But the threat of the import restrictions being extended to include fertilizers prompted a flurry of diammonium phosphates (DAP) and mono-ammonium phosphate (MAP) buying over the past week.

Russian producer EuroChem sold 80,000-85,000 tonnes of DAP and MAP as combined cargoes in the $570-575/tonne (€450-454/tonne) CFR (cost and freight) range to Argentina, Uruguay and Brazil.

“There is no demand pushing buying at the moment but buyers are just purchasing to be able to backdate the orders,” said a trader.

Drought conditions late last year adversely affected the corn crop and DAP and MAP offtake was reduced. This led to the high carryover volume left in the warehouses.

Recent rains have provided some relief but there was substantial damage to corn exposed to the heat during pollination and early grain fill.

Demand for phosphate fertilizers is also projected to be low next season, as farmers may be cautious in committing to a crop that will not yield healthy financial returns.

($1 = €0.79)

For more information on phosphates and other fertilizers, visit icis pricing fertilizers
Follow Karen Thomas on Twitter @KarenICIS

By: Karen Thomas
+44 208 652 3214

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