Phosphates market in waiting mode ahead of India budget

Sylvia Traganida

27-Feb-2015

Focus article by Sylvia Traganida

Woman working in an Indian farmLONDON (ICIS)–The phosphates market has adopted a wait-and-see stance this week as attention is drawn to India ahead of the country’s new budget on 28 February, according to sources on Friday. 

After this, fertilizer subsidies for the next fiscal year will become clearer, which will also give a direction for diammonium phosphate (DAP) demand and phosphoric acid pricing.

In China, the market is still subdued following the Lunar New Year holiday last week. Producers are fulfilling previous orders and focusing on the domestic season, before they start exports.

However, some producers have already started offering DAP and monoammonium phosphate (MAP) to India and Latin America.

In Brazil, demand is expected to kick off following the Carnival holiday. Already, Chinese, Moroccan and Saudi DAP/MAP is on offer in the region, sources said.

Market participants are optimistic about demand, assisted by the depreciation of the real against the US dollar and the increase in soybean prices.

West of Suez, the Tampa DAP benchmark remained stable following a Mosaic sale to Central America. In the domestic market, a range of prices has been heard for DAP barges, with Mosaic selling at $450/short ton FOB (free on board). Domestic demand has slowed down due to the adverse weather, but business is expected to increase in the coming weeks.

A US-based trader said that “the weather and lack of farmer buying is pressuring the market and people are clearly holding off right now”.

On the production front, most suppliers are sold out for March after executing previous contracts.

State-owned Tunisian phosphate producer Groupe Chimique Tunisien (GCT) is understood to be resuming DAP production following a lack in raw material and is expected to operate at normal if not higher rates in the coming weeks.

Moroccan producer OCP is committed through March, with shipments to the US, Ethiopia, Europe and Brazil.

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