Indian July DAP stocks fall on the month to 2mn t

Indian DAP stocks continued declining in July and fell well below their levels of a year ago, led by a year-on-year drop in imports and domestic output.

Stocks at the end of July fell to around 2mn t from 2.3mn t at the end of June, and well below the 3.6mn t a year ago, provisional government data show.

DAP offtake was around 1mn t in July compared with 1.26mn t in July last year, but outstripped combined production and imports by around 250,000t. Domestic output totalled 373,000t, lower than the 437,000t in July last year. And imports fell to a three-month low of 377,000t, according to line-up data, well below the 571,000t imported last year.

So far this year, monthly DAP imports have consistently remained below their 2023 equivalent. India has struggled to import DAP because the maximum retail price and nutrient-based subsidy mean current cfr prices — last done at $590s/t last week for Saudi product — equate to a substantial loss for importers. Even with the potential introduction of a special additional subsidy for DAP, the breakeven price for imported DAP would only be raised to the mid-high $540s/t cfr.

Major Indian importers are currently negotiating a purchase of 300,000-500,000t of DAP with Morocco's OCP for arrival until the end of December. But these volumes alone would not be sufficient to push up stocks in the coming months if other imports and domestic output stagnate. Offtake typically exceeds 1mn t/month over September-November.

By Adrien Seewald