In the first half of August 2024, Saudi Arabian market players raised the Diammonium Phosphate (DAP) prices notably by 10.7%. China's withdrawal from the fertilizer export market has reshaped global demand, leading to increased interest and higher prices, especially from Australia, Africa, and Nepal. Significant short-covering and inquiries from Latin America, along with preparations for shipments to Ethiopia, highlight strategic adjustments to the evolving supply landscape and underscore the crucial role of fertilizers in global agriculture. In China, Exports of di-ammonium phosphate (DAP) fell 37% in the first half of the year, reaching 1.51 million tons, while mono-ammonium phosphate (MAP) exports remained steady at 930,000 tons. Concerns about rising government intervention and unreliable Chinese supplies have led Asian fertilizer buyers to seek DAP alternatives from Russia, Vietnam, Egypt, and the Middle East.

The demand for DAP remained robust as buyers increased their purchasing activity in anticipation of the upcoming planting season. This heightened demand was driven by the need to stock up on fertilizers, crucial for successful crop cultivation in the region. Farmers and agricultural suppliers proactively acquired DAP to ensure they had sufficient resources for optimal planting and growth.

At the same time, Saudi Arabia's PMI declined for the third month in a row in July 2024, indicating a slowdown in the expansion of the manufacturing sector activities. Consequently, DAP exports were moderately low for the Asian importers, and the Far East Imports declined in July.  Far East imports are the sole trade category to decline compared to post-pandemic levels. Unlike the pandemic era, when backhaul trades often mirrored the surges in front-haul trades, the current index reveals a significant disconnect. This divergence likely stems from the diminished pressure on carriers to swiftly reposition containers, a stark contrast to the urgent equipment shortages experienced during the pandemic. Simultaneously, the production costs increased due to an increase in feedstock Ammonia prices due to firm demand from buyers and limited production rates at the manufacturing units. According to the ChemAnalyst data sources, DAP FOB Jeddah prices in Saudi Arabia witnessed USD 602/MT, at the end of the first half of August 2024.

As per the estimation, the DAP prices would increase in the Middle Eastern region during Q3, 2024. The demand for DAP is anticipated to remain firm from buyers, and the China Agricultural Means of Production Association (CAMPA) has also warned of possible tightening in phosphate export policies due to a surge in domestic prices and has advised against speculative buying. However, after September, as the fertilizer season ends and domestic DAP prices potentially ease, there may be hope for a moderation in exports, although this will depend on government decisions.