03 February 2012 14:31 [Source: ICIS news]
LONDON (ICIS)--Moroccan fertilizer producer Office Cherifien des Phosphates (OCP) could see some relief from weak demand on the horizon after emerging as the biggest winner of Ethiopia’s sizeable tender for diammonium phosphate (DAP), market sources said on Friday.
The Ethiopian government awarded OCP almost half the 232,000 tonnes of DAP requested in the tender, requesting the Moroccan producer deliver two 50,000-tonne lots and one 10,000-tonne lot during the second quarter of 2012.
OCP backed two offers submitted by trader Yara, winning the first 50,000-tonne cargo priced at $644/tonne (€489/tonne) CFR (cost and freight) and due to load early April.
The second cargo, offered at $649/tonne CFR, is likely to be shipped later that month, with the final 10,000 tonnes due to load in June.
However, the Ethiopian government rejected the Agricultural Commodities UAE offer and accepted just one 50,000-tonne lot of Ma’aden DAP from the Saudi Arabian producer.
Sharply declining DAP prices at the end of last year forced OCP to cut production by 30% – or around 250,000 tonnes – during the first quarter.
OCP also agreed to calls from India to delay contract cargoes of DAP from December to January and February, as buyers struggled to finance imports with a rapidly depreciating Indian rupee.
But a clutch of DAP, monoammonium phosphate (MAP) and triple superphosphate (TSP) sales at the end of January ended a business drought of almost two months and put OCP back into the market.
“Suppliers are in a better situation than three weeks ago and we are seeing more demand for DAP,” said one source. “The liquidation of length in Africa, Asia and Latin America will help to support prices.”
Midgulf International will deliver a 50,000-tonne cargo to Ethiopia under the tender, priced at $650/tonne CFR and sourced by SABIC from the Ma’aden plant in Saudi Arabia.
Jordanian producer JPMC will supply a 50,000-tonne lot, priced at $648.42/tonne CFR.
($1 = €0.76)
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