With a large domestic inventory and increased supply from China, the price of Di Ammonium Phosphate (DAP) imported into India keeps dropping. Importers are losing optimism about the future because of the declining prices caused by the limited global DAP demand. A deal between Russia and India last week caused a huge decline in DAP pricing of up to $40/t. Consequently, the price of DAP in the Baltic and Black Sea was reduced by $35/t. Strong DAP output and declining input costs for raw material Sulphur, Ammonia, and Phosphoric rock are raising worries about an excess of the product supply in Q2 of 2023.

Indian DAP prices have been falling throughout the first quarter of 2023, and domestic production subsidies have been reduced by almost 40%. Indian DAP producers would be seeking a considerable drop in the Phosphoric Acid contract price to protect their profitability.

As fears of a US recession increase, macroeconomic indicators remain mixed; additionally, the turmoil in Iraq is upsetting oil markets. This week's rise in Crude Oil costs can be attributed to the escalating violence in Iraq. The price of Brent crude increased from $76 to $78 per gallon. Brent oil now costs $78 per gallon, up from $76. TTF gas price in Europe has remained constant at $13/MMBtu, while the US Henry Hub natural gas price for this week has remained constant at $2/MMBtu.

DAP costs were reduced to around $700/t on a CFR base in Europe. Mosaic has reduced its DAP offer to $610/t FOB Tampa in the United States. Heavy Rainfall in the northwest has slowed down market activity in Europe, but April is predicted to witness a recovery in consumer confidence. Also, the market demand is not doing well overall. China's DAP experienced a similar decline last week, falling from $600 to $605 to $590 to $605/t.

According to ChemAnalyst, if key import markets do not experience significant buying pressure, international prices are expected to continue to decline. The sector expects a rise in demand at the end of spring. Only a few markets are experiencing active demand, and phosphate prices have decreased in both the eastern and western sections of the Suez Canal.