Amman November 02, 2021: Moroccan producer Office Cherifien des Phosphates (OCP) has settled phosphoric acid contracts with its joint venture partners for Q4 deliveries to India at USD1,330/tonne CFR (cost and freight).
The price reflects an USD70/tonne increase from the third quarter price of USD1,160/tonne CFR, making it the Sixth increase after COVID-19 declared Pandemic by WHO.
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These prices will also be applicable on deliveries made to Fauji Fertilizer Bin Qasim Limited the sole producer of DAP in Pakistanis. New prices will be effective from October 2021. Current prices are moving towards levels last seen in 2009 when Phosphoric acid prices crossed USD2,000/ton level and made high of USD2,310/ton.
Recent DAP imports in Pakistan are declined owing to lack of offers. An importer was interested in purchasing another DAP vessel but price indicators closer to USD750/ton have made imports unattractive.
It is estimated the DAP parity based on the first-quarter phosphoric acid contract price, coupled with higher ammonia prices would be around USD750/tonne CFR.
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This higher price would make it more cost-effective for India to import DAP than to produce it domestically using phosphoric acid.
India won’t increase subsidies on phosphorus-based fertilizers and has directed producers to refrain from raising prices, according to people with knowledge of the matter, threatening the firms’ margins as global costs of the raw material surge.
Chemicals and Fertilizers Minister Mansukh Mandaviya instructed the companies, the people said, asking not to be identified as the details aren’t public. A spokesperson of the fertilizer ministry declined to comment.
Prices of phosphoric acid and ammonia, used to make the soil nutrient, have soared in the world market due to tight supplies, putting pressure on Indian producers as they import a majority of their requirements. Some global ammonia makers have cut output or are seriously considering that option due to high natural gas prices.
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