US and Europe DAP Markets Dive on Weak Demand, Prices Surge in MEA

The Diammonium Phosphate (DAP) market in the European and North American regions prevailed in a bearish stance during the first half of November 2023, primarily due to a decrease in demand from end-user fertilizer markets. Further, the European region faces potential threats to winter crops amid unfavorable climatic conditions. On the contrary, the DAP market remained bullish in the Middle Eastern region amidst firm demand from the international fertilizer market during the same time frame.

The European DAP market has undergone a downward trend. Following one of the hottest summer seasons this year, the European region is currently grappling with a historically wet autumn. Unfavorable weather conditions, including Storm Ciaran and heavy rainfall in the northwestern countries of the European region, have significantly hindered the planting of winter crops. Consequently, this has diminished the expected demand for DAP for spring applications. Notably, domestic demand for DAP in Eastern Europe is absorbing a substantial portion of Russian production. This has acted as a mitigating factor against the impact of limited interest from Brazil in DAP. Furthermore, the demand for DAP is notably weak, influenced by a combination of adverse weather conditions and unattractive crop economics. These factors collectively contribute to a subdued level of interest in the market, thereby contributing to the ongoing decline in prices.

Similarly, the DAP market remained bearish in the North American region during the same period. Despite a significant increase in the price of essential feedstock Ammonia, its impact on DAP prices was limited. The price decline can be attributed to reduced demand for the product in domestic and international fertilizer markets. This week, import activities from Brazil were subdued, exerting downward pressure on DAP prices. Additionally, a lack of rainfall led to lower water levels in the Panama Canal, affecting exports to the South American region. Consequently, there was a surplus availability of material in the USA market. The combination of these factors contributed to a narrowed gap between demand and supply, further supporting the ongoing price decline.

On the contrary, prices in the Middle Eastern region experienced a surge during the first half of November 2023. The demand for DAP from the international market exhibited strength, particularly after India released a tender for imported DAP. Following China's National Development and Reform Commission (NDRC) reinstating the suspension of fertilizer exports, the responsibility of supplying the world with processed phosphate has shifted to the shoulders of the Ma'aden Phosphate Company of Saudi Arabia. Thus, the company is now commanding higher prices for DAP due to the increased demand and limited supply.