The global demand for ammonium phosphate is closely tied to agricultural practices and food price trends. When food prices are high, farmers tend to have stronger purchasing power, leading to increased use of phosphate fertilizers. Conversely, during periods of low crop prices, fertilizer usage typically declines. A 2013 survey revealed that global food prices experienced significant fluctuations between 2012 and 2013, but overall, they continued to rise. As the world population grows, food prices are expected to keep increasing, maintaining a steady demand for phosphate fertilizers. Moreover, with the expansion of aquaculture and animal husbandry alongside traditional grain farming, the demand for food—and consequently, for phosphate fertilizers—will continue to grow after 2013.
In 2012, the share of phosphate fertilizer demand decreased by 2.7%. According to the International Fertilizer Association (IFA), global phosphate fertilizer demand was forecasted to recover in 2013, growing by 3.5% to reach 41.4 million tons of Pâ‚‚Oâ‚…. The IFA also noted that global DAP imports remained stable in 2013, ranging between 14 to 15 million tons, compared to 6.6 million tons in 2012. It is estimated that DAP trade volume will reach approximately 6.7 million tons in 2013. While some regions like Southeast Asia saw a slight decline in imports, this was offset by increased shipments to Africa and Latin America.
For Chinese manufacturers, the main challenges include overcapacity, intense competition, and concentrated production windows from May 16 to October 15. Additionally, the low price of compound fertilizers has led to substitution, reducing demand for phosphate fertilizers. Changes in diammonium phosphate consumption patterns further impact the market.
For distributors, rising manufacturing and operational costs, along with low entry barriers, lead to fierce competition and thin profit margins. Fake or substandard products are also a growing concern. Meanwhile, urea price volatility directly affects phosphate fertilizer pricing. As a result, the industry faces ongoing challenges, prompting producers to adapt strategies based on domestic and international demand.
China’s ammonium phosphate exports stabilized in 2013, following the country’s shift from self-sufficiency to export-oriented policies since 2007. Diammonium phosphate exports remained around 4 million tons over the past three years, while monoammonium phosphate exports dropped significantly due to changing global fertilizer preferences. Heavy calcium superphosphate exports fluctuated due to policy changes and declining international demand.
India remains a key export destination for Chinese ammonium phosphate, with DAP exports to India reaching 665,000 tons in 2012, accounting for 16% of total exports. Thus, Indian demand strongly influences China's export volumes.
In 2013, export tariffs for both DAP and MAP were reduced by 2–5%, and the export window was extended to October 15, signaling a more flexible policy. However, the government still aims to control resource-based exports in the long term.
In the second quarter, the international ammonium phosphate market showed signs of recovery, driven by demand from the U.S. and South America. Prices rebounded from $475/ton to around $510–$515/ton, indicating a potential bottoming out. India is negotiating lower prices with Chinese suppliers, but domestic companies are seeking longer negotiation periods.
Global supply is expected to increase, with Saudi Arabia adding 700–1,200 million tons and China adding about 500,000 tons. Meanwhile, India’s DAP inventory is projected to rise by 15%, potentially reducing import demand. Argentina’s recovery in ammonium phosphate demand has limited impact due to its small base, while Brazil’s demand for DAP is limited but influences the broader phosphate market through monoammonium and superphosphate purchases.
Global overcapacity remains a major trend, with stable demand growth over the past two years. India, as the largest importer of DAP, presents uncertainties. The global DAP market is expected to face oversupply in 2013, with extreme weather potentially worsening the surplus and putting downward pressure on prices.
As the export window opened in May, Chinese phosphate fertilizers began flowing into international markets. With India expected to maintain export prices between $510–$525/ton, the domestic market is likely to remain stable during the peak demand period in September and October.
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