OREANDA-NEWS. March 15, 2010. PhosAgro entered into a long-term contract for diammonium phosphate (DAP) supplies with IFFCO and IPL, which control more than 70% of DAP imports to India. The holding says the agreement has been priced at USD 1.5 billion and estimates the contractual volume of 20% of all DAP imports to India. Under the previous contract, signed in February 2009, PhosAgro supplied to India some 1.2 million tons of fertilizers.

In our opinion, the large volume of scheduled DAP supplies to India should exert a positive impact on Apatit, which switched to a tolling scheme in its relations with Ammofos and Balakovo Mineral Fertilizers in early 2010. Although PhosAgro has not disclosed the real contractual price, we suppose, in view of the current market price level, that it has notably surpassed the last year’s price: to date, DAP prices have rocketed by 85% from the June 2009 minimum of USD 270 per ton, and by 27% from the year-beginning, up to USD 500 per ton. As for Ammofos, the new contract could enable in to raise capacity load and receive additional income from tolling processing, which is to positively affect its financials.