DAP last week
DAP (diammonium phosphate) prices failed to show any positive momentum at the four locations in the chart below last week (ended July 7). China and India both use DAP extensively. (To learn more, read An Overview of 3 Key Agricultural Markets: China, India, Brazil.)
Last week, the average DAP price at the above four locations fell 66 basis points on a week-over-week basis. DAP prices in central Florida fell the steepest, dropping 1.5% to $295 per metric ton from $299 one week previously.
Similarly, DAP prices in Tampa Bay fell 58 basis points week-over-week to $343 per metric ton from $345. Within the US, DAP prices in NOLA (New Orleans) remained unchanged at $282 per metric ton from the previous week.
DAP prices in the US are largely trading at the same levels we saw in the corresponding week one year ago. DAP prices in Tampa and central Florida have remained almost unchanged YoY (year-over-year), while DAP prices in NOLA rose 3% YoY.
Morocco has the largest reserves of phosphate rock, which is used to make DAP fertilizers. Last week, DAP prices in Morocco fell 55 basis points to $362 per metric ton from $364. But prices in Morocco were 6% higher last week on a YoY basis.
Notably, Israel Chemicals (ICL) is an active player close to Morocco and is tapping the Indian and Chinese markets.
What’s clear now is that DAP prices keep extending losses, and a reversal is nowhere in sight. Low natural gas prices aren’t helping producers (XLB).
In the next part, we’ll discuss MAP (monoammonium phosphate) prices in Brazil, which uses more MAP fertilizers than DAP.