Pakistan's DAP inventories recovered slightly over May despite a second consecutive month without imports as demand slowed.
Demand totalled 61,000t in May, NFDC data show, below the 94,000t five-year average for the month in 2021-25. While May is the typical off-season, offtake has been slowed further by demand destruction thanks to higher domestic prices.
Domestic production rose slightly but remains broadly in line with normal at 78,000t. Local phosphate producer Fauji secured its usual volumes of phosphoric acid for the second quarter despite a slowdown in Moroccan output because of tight sulphur availability.
There were no imports again in May, as buyers were put off by higher prices since the start of the Mideast Gulf war. Attempts to secure Saudi Arabian DAP failed as the strait of Hormuz remains largely closed.
Pakistan entered June with 220,000t of DAP in stock, below the 265,000t five-year average for the period but still relatively comfortable given tightness in global supply over the second quarter.
Importers will have to secure more DAP
The country has enough DAP for most of the third quarter, but more imports will be needed to cover the high season from October onwards.
Using NFDC June opening stocks, production and demand estimates, as well as the 64,000t of DAP lined up for arrival in Pakistan in June according to Argus data, Pakistan could enter the October-March rabi season with 61,000t of DAP in stock.
Pakistan finished September with an average stock level of 335,000t of DAP in 2021-25. If it wants to enter October with similar inventories, Pakistan will have to step back into the market in the third quarter.
International prices currently remain firm, but importers hope that the signing of a memorandum of understanding between the US and Iran will allow for a return to normalcy for cargo transit via the strait of Hormuz. Bearish sentiment in the market pressured the weekly DAP assessment down to $925-950/t cfr Pakistan yesterday.
