February 8, 2010

Global fertiliser prices resume upward climb

International fertiliser prices are steadily inching up, though nowhere close to their all-time-highs in July-September 2008.

Imported urea is currently at about US$340-350/tonne (cost & freight Indian ports), having climbed from the US$250-260 levels reached in September.

Di-ammonium phosphate (DAP) prices too, which had dipped below US$350 a tonne last May and remained so till about July, have since gone up to US$380 in November, US$460 in January and now quoting at US$550-plus.

A similar trend has been observed in various fertiliserintermediaries.

Phosphoric acid, a key ingredient for manufacture of DAP, was being imported at about US$530 a tonne in July. These, then, rose to US$570-600 by November and US$630 towards January. Currently, suppliers from Morocco, South Africa and Tunisia are not accepting quotes for less than US$700 a tonne.

The hardening has been even more for sulphur. Till September, this raw material used in manufacture of phosphoric acid, was available at US$55-65 a tonne. Since then, there has been an increase in its landed prices to US$75 in October, US$100 in November, US$140 in December, US$150 in January, and to almost US$200 a tonne now.

Imported ammonia prices are now in the region of US$330-340 a tonne, against US$260 levels of September.

The present urea prices are, however, still a far cry from their peaks attained during the global commodity boom in 2008. Landed prices of urea prices hit US$825 a tonne in August 2008, just as the maximum amounted to US$1,330 a tonne for DAP (May 2008), US$2,400 a tonne for phosphoric acid (July 2008), US$840 a tonne for ammonia (September 2008) and an incredible US$850 a tonne for sulphur (July 2008).

The timing of the price increase is also significant, given that the February-March period is when not only Indian companies contract their requirements for the kharif season, but also when buyers such as China and Brazil also enter the market.