India's DAP fertilizer stocks fell by another 300,000t in July, Fertilizer Association of India (FAI) data show, as imports kept lagging those in 2023 owing to a subsidy that makes them unviable.
This was the second month in a row that stocks have fallen during the kharif season (April-September), with June seeing inventories down by 430,000t.
India made 373,300t of DAP in July, imported 348,000t and sold just over 1mn t. The stockdraw/build — production plus imports minus offtake — was thus minus 296,300t. Argus estimated stocks at a modest 2mn t as of the end of July, with indications that they have since dropped to 1.5mn t as of mid-August.
The catalyst has been a lack of imports. With Chinese DAP export supply thin, fob values from that origin have risen well above $600/t fob. Latest DAP import sales were made in a $618-625/t cfr range, whereas the subsidy makes any deal above $545/t cfr unviable for importers. This has restricted buyers to government-backed companies and the very largest DAP importers.
Cumulative imports for the fertilizer this year to date — since April — reached 1.47mn t, compared with just over 2.7mn t in the same period of 2023, the FAI data show.
DAP production has also lagged slightly, at 1.37mn t in April-July, compared with 1.62mn t in the same period last year, as raw material shipments were affected by the Houthi attacks on Red Sea shipping, affecting supply of phosphoric acid, a key raw material for DAP production in India.
Stocks would have been lower still had it not been for lower offtake overall, at 2.94mn t in April-July, compared with 3.43mn t in the same period last year. Lower offtake is partly the result of less supply and buyers switching to NPK products for which stocks are higher.
