India has imported around 3.5 Lakh Ton (LT) fertilizer in the ammonium phosphate (DAP) from Russia, which will arrive during the period April to July. This happened in the midst of Western sanctions against Russia after the Ukraine invasion.
Imports have been contracted by Indian Potash Ltd., chemicals & rashtriya fertilizer, chambal fertilizer and Kishak Bharati cooperative with a price of landing $ 920-925 per ton, cost plus goods (CFR). This is below the tariff paid by other countries for DAP, especially from China, Saudi Arabia, Morocco and Jordan.
The Bangladesh Ministry of Agriculture, earlier this month, gave an annual tender for imports of 8.12 LT at $ 1,020-1,030 per ton. Likewise, Indonesia and Thailand are reported to have paid $ 992 and $ 1,000 per ton CFR each for shipping 25,000-26,000 tons each. Pakistan has not been able to contract lately even at $ 1,030 CFR, with the depreciation of local currencies against the dollar adding uncertainty.
India contracted DAP from Phosagro Russia at a price of $ 920 per ton CFR – which is also a price limit that has been included by the government – is likely to put pressure on other suppliers, especially the Moroccan OCP group, Yuc China and Ma’aden Saudi Arabia and Sabic. They may have to cut prices to maintain market share.
“This is a smart strategy to diversify one’s sources of supply. We did this in the urea by importing a large amount of 47,000 tons for the first time from the US. The same thing was done by finding more DAP (the second most consumed fertilizer in the country) from Russia with an international discount, “Sumber Industri told Indian Express.
The total arrival of DAP imports for April-July is projected at 9.5-9.8 lt. From that, around 3.5 LT will be supplied by Phosagro, with Ma’aden and Sabic’s share at 2.8 LT, YUC at 1.27 LT and OCP at 1.03 LT.
India, in 2021-22 (April-March), imported 58.60 LT from DAP for $ 4,007.50 million. Most of the 58.60 LT imported were calculated by China (20.43 LT), Saudi Arabia (19.33 LT), Morocco (12.13 LT) and Jordan (2.46 LT).
Importing from Russia has presented problems from sanctions, forcing the “innovative method” to make payments. “The risk in this case must be borne by the seller (phosagro), because the bank does not want to open a credit letter (to function as a guarantee of payment) in the name of the importer. Payment is then made by telegraph transfer to the seller’s account, after the last physically presents the required documents (copy of invoice, origin certificate, lading bill, insurance policy, etc.) 7-10 days after the cargo sails, “the source explained. The total time of the trip from The Russian Baltic Sea Port is 25-30 days.
“Imports have come at the right time when the sowing for the Kharif season has just begun and will peak in July,” Sumber added.