India possibly started August with 1.75mn t of DAP in stock, up by 181,000t on the month, because of a hike in imports, provisional data show.
Domestic DAP production is expected to total 327,000t over July, with imports rising to 864,000t, the highest of any month in almost two years, line-up data show. Additional financial support to importers, as well as long-term offtake agreements with Morocco and Saudi Arabia, have helped boost imports.
Combined production and imports are expected to outpace the 1.03mn t in offtake, raising stocks from an estimated 1.57mn t at the start of July.
Indian stocks have recovered from their 1.1mn t low at the start of December, and the government's department of fertilizers now feels secure enough to encourage importers not to buy DAP at higher than $810/t cfr — the price of DAP for business in recent weeks, including last week's Saudi 60,000t DAP sale to importer IPL.
The August DAP import line-up totals 905,000t, which could help support stocks further. This is despite domestic DAP production remaining similar to last year, as producers are still focusing on making NPKs and NPS instead of DAP because of better margins.
DAP shortages have pushed some farmers to meet their phosphates demand by sourcing alternative products such as NPKs, NPS, SSP or TSP. Imports for the latter are expected to total 199,000t in July, outpacing 70,000t of offtake, and leaving TSP stocks at 254,000t at the beginning of August.
April-July DAP offtake is expected to total 2.58mn t, lagging behind the 2.94mn t sold over the same period last year. But demand could recover as DAP availability improves.
Importers will need to maintain strong imports if India is to begin the October-March rabi season with comfortable DAP stocks, and if domestic production is inclined to remain steady.
