MOP imports to Indonesia and Malaysia fell by double-digit figures in February, even before buyers delayed purchasing as the Covid-19 pandemic emerged.
Demand is already showing signs of struggling to reach last year's levels, import data show. And last year was not a strong one for MOP demand in either country, as various factors took Indonesian and Malaysian MOP imports down from 2018 levels by 20pc and 33pc, respectively.
Indonesia imported 2.8mn t last year, down by 20pc on 2018 and the lowest level since 2016. Malaysia's MOP imports fell by a third last year to 1.13mn t, the lowest since 2009, when MOP imports collapsed to just 642,000t in the aftermath of the 2007-08 global financial crisis.
The impact of falling demand for imports resulting from the viral pandemic is more likely to show up in March and April, but import data are not out yet. The main import season for potash in Malaysia and Indonesia usually begins in March-April too, but so far this year, imports are down by about 35pc in both countries.
Weather conditions, payment issues, high MOP stocks at the start of last year and fluctuating palm oil prices continue to contribute to demand cuts by plantations owners.
Crude palm oil (CPO) front-month futures on Bursa Malaysia are up by only about 140 ringgit/t from a year earlier, at 2,285 ringgit/t. CPO future prices started to rise in October last year, hitting highs for the year in early January 2020 of 3,131 ringgit/t before tracking back down.
Imports to Indonesia fell to their lowest February total since 2016. February MOP imports were at about 227,000t, down by 35pc on the same month a year earlier.
Indonesia's January-February MOP imports of 518,000t are lagging 31pc behind last year's levels of 752,000t, but were still higher than in 2018, when imports were 508,000t.
Indonesia imported the most MOP of the period from Canada, with 224,000t of the 518,000t total, representing deliveries from distributor Canpotex and K+S' Bethune mine. But tonnages fell by 30pc on the year, as all traditional suppliers imported less to Indonesia in January-February. Russian MOP imports, representing Uralkali and Eurochem cargoes, fell by 41pc to 102,000t. Belarusian and Lithuanian imports, representing Belaruskali MOP, fell by 19pc to 118,000t. Imports from Jordan in January-February were just 488t, compared with 43,322t a year earlier.
In Malaysia, February imports were down by 10pc to 112,000t. But January-February imports were down by 36pc to 186,000t, levels not seen since 2017.
Malaysia imported the most MOP from Canada in January-February, at almost 71,000t, down by just 1pc on January-February last year. Imports from the US rose from zero to 12,400t in the period. Imports from Russia fell by 57pc in the period, to about 37,000t, while imports from Belarus and Lithuania combined were down on the year by 60pc to about 25,600t. Malaysia's imports from Jordan rose by 9pc to just under 29,000t.
