India books phosphate fertilizer at 40% above pre-war prices
India, the world’s top buyer of diammonium phosphate, has contracted larger-than-expected volumes of the crop nutrient, a sign of stockpiling as the conflict in the Middle East disrupts supplies and drives global benchmarks higher.
The country booked about 12% more than the 1.2 million tons sought in the tender that closed last week, according to people familiar with the matter. Indian Potash Ltd., which imports fertilizers for the government and other companies, will secure 705,000 tons for delivery on the country’s west coast at $930 per ton, said the people who asked not to be named discussing private information. Another 641,500 tons will be delivered on the east coast at $935 per ton, they said.
The offers are roughly 39% above rates, including freight costs, seen before the start of the Middle East conflict, according to Green Markets data. Indian spot prices were quoted at $667.50 a ton on Feb. 27, the data showed.
A spokesperson for the fertilizer ministry didn’t respond to an email. India’s government partly subsidizes sales of DAP fertilizers to farmers at below market rates.
Although the Middle East is a smaller supplier of phosphate fertilizers than nitrogen-based varieties, it accounts for nearly half of the global supply of sulfur, an essential feedstock, leaving the market exposed to disruptions in the Strait of Hormuz.
The development comes at a time when the conflict is affecting global supplies. Mosaic Co., the US’s biggest phosphate fertilizer maker, is temporarily taking nearly 2 million tons of production off the market. It cut output at two of its plants due to higher prices of sulfur.
India also procured 2.5 million tons of urea in a recent tender, paying nearly double the pre-war levels. The purchases are coming at a crucial period ahead of sowing for monsoon crops such as rice, corn and soybeans.
(By Pratik Parija)
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