Argentine DAP/MAP imports could climb in coming months

Argentina's DAP and MAP imports have remained below normal so far this year, and buyers have been on the sidelines since August in particular. But an increase in soybean planting could see sales rebound in the fourth quarter.

Phosphates purchases were slow in August because importers were delaying purchases in anticipation of a government announcement about an import tax reduction. The government announced on 2 September that import tariffs would be reduced from 17.5pc to 7.5pc. But despite that buying has remained slow because of unfavourable crop prices and sowing conditions.

Argentina imported 32,000t of MAP in August, the lowest of any August since 2008, according to GTT data.

MAP imports in January-August totalled 476,000t, down significantly from the 555,000t average for January-August 2019-23. MAP imports in the same period last year — 484,000t — were also below norms because of an abnormally dry climate and the increased risk of leafhopper swarms damaging crops.

DAP imports were also down in August at 15,000t, compared with the 2019-23 August average of 36,000t. DAP imports in January-August totalled 210,000t, slightly above 208,000t in the same period last year but below the 243,000t average for the same period in 2019-23.

Above-normal July DAP/MAP imports, which totalled 195,000t, only helped to offset some of the deficit over the first half of the year.

DAP/MAP deliveries look sluggish in September-October

Adverse conditions delaying planting, combined with soft corn prices, have pushed back demand for fertilizers.

Upriver corn prices saw a 13pc year-on-year decline to $198/t fob upriver Argentina as of 26 September.

Concerns have been aggravated by the rising frequency of crop destruction by leafhoppers, as well as dry weather, with the country's farmland recording scant rainfall in the past few months. The chances of the country experiencing another La Nina spring phenomenon are high, meaning low rainfall and increased risk of frost, which would lead to a poor corn harvest. These factors have further increased farmers' reluctance to buy DAP/MAP. Local sources expect that the national corn acreage will be reduced by 1mn-2mn hectares (ha) this year because of late planting.

At least 128,000t of DAP/MAP is scheduled for arrival in Argentina in September-October, according to line-up and LHB data. But in 2019-23, the country imported an average of 54,000t of DAP and 228,000t of MAP in the same period, according to GTT data.

Increased reliance on soybean crops could support DAP/MAP imports

A shift towards increased soybean planting could lift the country's need for phosphate-based fertilizers and boost P2O5 demand until the end of the year.

Farmers will increase the soybean-planted area by 1.7mn ha at the expense of corn, as the economics of the former are more favourable than the latter, according to the Buenos Aires Grain Exchange (Bage). The exchange added that the majority of soybean hectares have a greater than 60pc chance of breaking even, while the odds are less than 50pc for the majority of corn hectares.

Local sources expect that between 500,000 ha and 1mn ha of corn acreage can be replaced with soybean crops this season. For the 2024-25 marketing year, Argentina is projected to increase the national soybean area by 9.8pc to 19mn ha, according to a Bage outlook. And the US Department of Agrciculture expects Argentina's soybean output to reach 51mn t for this season, up from 48.1mn t last year.

But delays in reaching a decision on which crop to plant limits the amount of fertilizer that can arrive in time, with local market participants citing concerns about a potential logistical bottleneck before the planting period in late 2024. DAP/MAP imports typically peak over May-October and decline around November.

By Renata Cardarelli and Adrien Seewald

Argentina August DAP-MAP imports '000t

Argentina monthly DAP-MAP imports '000t