DAP tumbles $130-260/t in latest India purchases

02 October 2008 17:06  [Source: ICIS news]

LONDON (ICIS news)--Prices of Russian and US phosphate fertilizer fell $130-260/tonne on latest deals into India, as demand elsewhere dried up with dealer inventories full globally, market participants said on Thursday.

 

In the latest round of business, trader company Ameropa was understood to have sold three Russian diammonium phosphate (DAP) cargoes at $975/tonne (€692m/tonne) CFR (cost and freight) with another trader, Helm, also reported to have sold a Russian cargo at similar levels.

 

The FOB (free on board) netback to Baltic ports was estimated to be around $840/tonne, a fall of $260/tonne on last business at around $1,100/tonne FOB.

 

Current bids in India had since fallen to $950/tonne CFR, trader sources said. 

 

In the US, it also emerged that trader Oakley sold a US DAP cargo to India at $1,010-1,020/tonne CFR, netting back to $940-950/tonne FOB Tampa, a fall of $130/tonne on previous business at $1,080/tonne FOB.

 

Force majeure on the US cargo was accepted by the Indian buyer in view of production problems as a result of hurricane damage at supplier Agrifos’s Pasadena, Texas facility.

 

The key DAP Tampa US FOB price has now fallen from a high of $1,230/tonne in April/May this year following a 17-month uninterrupted rise in prices due to strong commodity prices and farmer demand.

 

In a related move, US producer Mosaic announced that it would be cutting phosphate output by 500,000-1m tonnes over the next few months in order to balance inventories.

 

In the current bearish market, buyers continued to hold off from buying, sources said.

 

This was particularly evident in Latin America where dealers were reluctant to replenish stocks until farmer offtake increased, traders added.

 

($1 = €0.71)

 

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Author: Mike Nash
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