VIETNAM:   Additional sales of DAP from outside the region have been reported this week. Ameropa has sold 25,000 t Mexican DAP at $380 cfr for first half March shipment, reportedly to Vigecam. TSC Can Tho is understood to have purchased 20-25,000 t Russian DAP from Ameropa at $379 cfr. TSC Can Tho is also reported to be the buyer of the 20-25,000 t DAP sold by PhosChem last week.

Chinese offers have been withdrawn due to the introduction of the 110% export tax effective 1 February. Last business was agreed at $400 cfr for black DAP and $350 cfr for brown DAP.

The following DAP quantities are estimated to have been booked for December onwards shipment for the spring season:

Demand for the first half of the year is forecast at 300,000 t DAP. Following the sales of US, Russian and Mexican DAP in recent weeks, importers now appear to be wary about buying additional tonnage. Prices for Chinese DAP in the domestic market have been reduced from Dong 8,600 kg to as low as Dong 8,000 kg.

PetroVietnam is asking Dong 9,820 kg for Philphos NPK 16-8-8.

The urea market this week was showing signs of recovery when China again turned the market upside down with news that it would reduce the export tax as of 1 December to 10%. Offers coming out today show that sellers are already willing to move tonnes below Chinese domestic prices and numbers as low as $250 fob including the tax have been reported. China last year proved it can move a massive volume in a very short space of time, last December exporting 1.5 million t alone. The threat of such volume and the aggressive nature of the price could halt any anticipated upside to the market witnessed before this news.

Pakistan came to the market this week and bought 100,000 t at $284.90 cfr, a move up from the $253 secured last week by India, a solid move up even taking into account higher costs of transacting and shipping cargo to Pakistan. Yuzhnyy prices appeared to be moving up although traders were still unwilling to reposition any volume and were only looking in general to cover outstanding shorts.

With India expected back in the market, further tenders anticipated from Pakistan, sales into Europe especially Turkey and some Latin American sales, the supply/demand balance seemed to be looking healthier especially considering the outages already in place. With China back in the market however, any recovery now appears to be under serious threat. China could chose to trade way below Ukrainian costs of production and further cutbacks in the FSU could be inevitable. Gas contracts for next year are already under discussion in Ukraine with Russia and unless the supplier is ready to concede to lower prices to maintain demand in the region, then we could face the loss of Ukrainian supply over the winter.

Other forms of nitrogen are also under threat with amsul prices sliding again, nitrate prices coming down for export and within domestic markets in the FSU and further cutbacks announced, this week in Bulgaria. UAN is at a standstill with no immediate relief in sight and those supply points already down expected to stay down for several weeks.