en.Wedoany.com Reported - According to the latest statistics from the Fertiliser Association of India (FAI), the combined total of imports and domestic production of diammonium phosphate (DAP) in May exceeded consumption, driving inventories up by 33,000 tons from the previous month, with opening stocks at 1.93 million tons.
Domestic DAP production in May reached 393,000 tons, the highest monthly level since August 2024. Influenced by rising international DAP prices, the domestic production margin based on ammonia and phosphoric acid was nearly $200 per ton higher than imported DAP as of the week ending June 15.
DAP imports rebounded to 132,000 tons in May, higher than the sluggish arrivals in March and April, but only about one-third of the average import volume of 393,000 tons for the same period from 2021 to 2025. Uncertainty over whether importers can obtain loss compensation from the government, coupled with sharp price increases since the outbreak of the US-Iran war, has dampened purchasing intentions.
Domestic sales rose seasonally to 492,000 tons in May, still below the five-year average of 573,000 tons for the month. Indian importers need to increase DAP procurement in the coming months, as domestic demand is set to enter a seasonal uptrend in the third quarter of 2026 and peak in the fourth quarter.
With phosphoric acid prices expected to rise, profit margins for DAP production using phosphoric acid may come under pressure in the next quarter. Producers and traders believe that, given the continued rise in sulfur costs and tightening supply in the second quarter, phosphoric acid prices will be significantly raised from the second-quarter settlement of $1,360 per ton P2O5 cfr. Insufficient ammonia stocks allowed Indian importers to secure lower-than-expected settlement prices in second-quarter 2026 phosphoric acid negotiations, but improved ammonia supply in the second quarter may weaken their bargaining power in third-quarter negotiations.
Indian importers are expected to release new DAP demand soon. A notable de-escalation in military confrontations near the Strait of Hormuz has increased the likelihood of DAP price softening, thereby delaying the release of India's import demand.
India's demand for triple superphosphate (TSP) rose to 59,000 tons in May, but with no imports arriving for the third consecutive month, inventories fell to 314,000 tons. Stocks are expected to recover as 100,000 tons of Moroccan TSP purchased earlier this month (shipped in June-July) and an additional 100,000 tons from OCP (shipped in June) arrive at ports.
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