The most common phosphorous fertilizers include ammonium phosphates such as DAP (diammonium phosphate) and MAP (monoammonium phosphate). Let’s see how prices of DAP traded in the week ended September 23, 2016, at the five locations depicted in the graph below.
Average weekly DAP prices at our five locations were flat to negative for the week ended September 23. In the US Corn Belt region, DAP prices were flat at $326 per metric ton compared to a week ago. Similarly, the average weekly prices for DAP in China remained flat at 2,644 yuan last week. Prices at Tampa Bay also traded flat last week at $339 per metric ton.
Morocco has the largest phosphate rock reserves. It saw the average weekly price of phosphate unchanged at $345 per metric ton compared to a week ago. Phosphate rock is one of the key inputs required for producing phosphorus fertilizers such as DAP and MAP.
On average, prices at the above locations, excluding China, have fallen 26% year-over-year.
Ammonia is a feed stock for producing DAP and MAP. Ammonia, natural gas, and phosphate rock prices impact phosphate fertilizer producers such as Mosaic (MOS), Israel Chemicals (ICL), Agrium (AGU), and PotashCorp (POT). You can get access to some of these companies through the VanEck Vectors Agribusiness ETF (MOO). MOO invests about a third of its portfolio in agricultural chemicals.
In the week ended September 23, 2016, phosphate rock prices moved sideways to $109 per metric ton and fell 11% year-over-year.
In the next part, we’ll take a close look at MAP prices.