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Diammonium Phosphate: Where Are Prices Headed?

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Diammonium phosphate prices

Ammonia is used to make phosphate fertilizers such as DAP (diammonium phosphate) and MAP (monoammonium phosphate). Ammonia and natural gas prices impact phosphate fertilizer producers such as Mosaic (MOS), Israel Chemicals (ICL), and PotashCorp (POT).

Ammonium phosphates, especially DAP, are the most widely used phosphate fertilizers globally, according to Mosaic. Notably, the VanEck Vectors Agribusiness ETF (MOO) invests about 2.9% of its portfolio in Mosaic and 7.5% in Syngenta (SYT).

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Price comparison

For the week ended May 20, 2016, the average price of DAP in the Corn Belt declined 1.3% to $344 per metric ton ($380 per short ton) from $349 per metric ton ($385 per short ton) in the previous week. DAP’s average price in China inched down to 2,691 Chinese yuan per metric ton ($410 per metric ton) from 2,694 Chinese yuan. The average US Gulf NOLA (New Orleans) DAP price fell by 2.8% to $282 per metric ton ($311 per short ton) from $290 per metric ton ($320 per short ton).

Similarly, the average realized price for Port Tampa Bay DAP declined by 0.6% to $357 per metric ton, compared with $359 per metric ton in the previous week. Similar to nitrogen fertilizer prices, US Gulf Coast NOLA, Tampa Bay, and Corn Belt DAP prices have remained down by an average of 25% year-over-year. In the next part of this series, we’ll turn our attention to the second-most important phosphate fertilizer, MAP.

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