India's DAP inventories increased by a net 682,000t last month, buoyed by solid imports, bringing stock levels to as high as 3.87mn t by the start of May.
The net rise of 682,000t in April marks the highest monthly stock expansion since May 2019 and eclipses the stock increase of 650,000t in March 2022 (see chart). DAP inventories rose by 443,000t in April last year.
Imports in April were 614,000t, according to Argus' latest line-up, combined with domestic DAP production of 368,000t to offset sales of 300,000t, latest provisional data show. Imports and domestic output were both lower in the month last year at 410,000t and 335,000t, respectively, while sales were stable.
Stocks have expanded by 1.85mn t in January-April, outstripping the 1.73mn t rise in the period last year. A boom in imports has fuelled the rise in inventories, with 2.53mn t of DAP so far scheduled to have arrived in January-May.
Stock levels were estimated to be as high as 3.87mn t at the start of this month, according to a local source. Indian stocks were last at that level in October 2020, before inventories crumbled to a nadir of 1.13mn at the end of 2021.
And stocks are set to receive another boost with the May import line-up currently at around 625,000t, Argus' data show.
The rise in inventories affords importers a significant degree of insulation from external price shocks. Bangladesh is set to return to the DAP market with its annual private-sector purchase tender later this month and Pakistan importers may begin securing more cargoes in June-July, tightening the supply-demand balance east of Suez.
Despite the anticipation of more buying on the subcontinent in the months to come, pressure remains on the DAP cfr India price, with levels dropping to a two-year low of around $530/t cfr this week, down from $695-698/t cfr at the start of the year.
