Methodology and specifications guide

ARGUs FMB phosphates

Contents:
Introduction2
Publication frequency
2
General methodology
2
Assessing price ranges
2
Spot, contract and formula pricing
3
Terms3
Units3
Lot and cargo sizes
3
Products and specifications
3
Price Guide how prices are defined
4
Ethics and compliance
8
Corrections to assessments
8

Last Updated: august 2014

The most up-to-date Argus FMB Phosphates methodology is available on www.argusmedia.com

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Methodology and specifications guide

Introduction

Assessing price ranges

Argus publishes the Argus FMB Phosphates report once a week on

a Thursday evening in the UK. The report contains a variety of prices
and market commentary on international bulk markets of finished
phosphates as well as key raw materials phosphate rock and phosphoric acid. These prices are published in the weekly report and in
the Argus FMB International Fertilizer Price Guide.

Publication frequency
The weekly Argus FMB Phosphates report is published 50 weeks of
the year on a Thursday evening. The report is not published for one
week during the Christmas/new year holidays in the UK, although
the precise timing of non-publication depends on which days the
national holidays in the UK fall. An abbreviated report is sent by
email during the International Fertilizer Industry Association (IFA)
main global conference, which normally takes place in late May or
early June each year. This takes the form of an extended market
update email alert with the International Price Guide attached.
Specific pricing references in the US (Nola DAP barge ($/st), DAP
Tampa fob (for exports) and Central Florida rail are assessed in
London (after consultation with the Argus FMB Houston office) and
included in the Argus FMB North American Fertilizer report, which is
subsequently published from Argus Houston office later on a Thursday (CST).
Argus FMB also publishes market updates that provide real-time
deals and pricing information and other market news stories affecting fertilizer supply, demand and pricing. These are produced on an
ad-hoc basis. There is no minimum number of daily updates and
frequency reflects market liquidity and the timing of other market
news events. Those who subscribe to the online service will also see
these updates on Argus Direct.

General methodology
The Argus FMB editorial fertilizer team consists of specialised and
highly experienced editors based in the UK who work closely with
our global network of correspondents in Singapore, Beijing, Delhi,
Houston, Moscow and other parts of the world to produce weekly
price reports.
The team surveys a wide variety of market participants during the
course of the week, from traders to producers to buyers as well as
other analysts, mostly by telephone, skype, email, instant messenger and during conferences through face-to-face meetings. As
regards pricing, this survey seeks to confirm what business has
been done, by whom, as well as firm bids and offers. The goal is to
cross-check market transactions from all participants wherever possible. The survey also seeks to ascertain fundamentals data, tender
news and supply and demand information. Argus will contact and
accept market data from all credible market sources including front
and back office of market participants and brokers.

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August 2014

Phosphate prices are assessed in various regions, countries and

within countries on a free on board (fob) basis in the main export
regions and on a cost and freight (cfr) basis in the main destination
markets. Deals, bids and offers must be considered repeatable to
be reflected in the assessments.
The report seeks to determine price ranges in which actual transactions are taking place or in which transactions could have taken
place between a willing buyer and seller. In markets that periodically
lack liquidity, Argus FMB may assess price ranges based on judgment, in view of market discussions with buyers and sellers, and
what we consider to be achievable given prices paid in end-user
markets and appropriate netbacks from these deals (using actual
fixtures or indicative freight levels), balanced against a sellers order
book and propensity to sell. Where there has been no discoverable
business in a week for a specific pricing point, prices are usually
held at the previous weeks range. However, in the absence of
verified high or low deals, Argus also reserves the right to make an
assessment of the range based on what deals could have been
achieved within that timeframe based on market fundamentals.
Information on transactions, bids and offers that lie outside the
specifications of timing, size, location and quality may be used
in assessing price ranges, but data on deals that lie within these
specifications are given most weight.
The price guide reflects the last seven days of business Friday
through to Thursday. However, while all information and trades are
taken into account, in periods of high volatility, assessments are
weighed towards trading activity later in the week or at the end of
the Thursday of the assessment.
It is important to note that prices are only ever re-assessed or corrected if new data come to light on a previously reported deal or
sale. If subsequently, a transaction comes to light within the sevenday period but its existence was not known by the editor and not
reported by 17:00 London time on a Thursday night, the particular
price range is not retrospectively changed as a result of this information becoming known subsequently.
When there is sufficient liquidity and deals data are deemed reliable
and representative, the price range will be defined on the low and
the high end of confirmed deals concluded throughout the trading week. These deals must meet the minimum volumes and strict
delivery timing, as well as specifications as laid down in this methodology. Wherever possible, Argus seeks to validate all deals from
buyers, traders and sellers all parties in the deal chain.
There will be occasions when a specific deal may fall well outside of
the generally observed lows and highs that operated throughout the
trading day or raise other concerns, in which case the editor shall
subject the deal to further scrutiny, which will involve consultation
with industry sources and review by other senior Argus management. This process is critical to ensuring that the Argus range of
trade remains representative. Argus reserves the right to exclude

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Methodology and specifications guide

deals from the range of trade if these are considered unrepresentative or unrepeatable.
From time to time, Argus FMB may report on deals that we define as
distressed cargoes. These are either cargoes that are sold below
the prevailing market price in order to make a quick sale or reflect
the sale of damaged or off-specification goods. There have been
occasions, owing to delays in issuance of letters of credit, or a sudden switching of a port destination, that have necessitated a seller/
buyer paying an excessively high freight rate, in turn adversely affecting fob netbacks. Argus FMB reserves the right to exclude such
transactions from its price assessment on the basis that they are not
considered representative of the market, particularly if an unusual
requirement on timing was part of the contract terms.
There are occasions where, if trade is disrupted from a specific pricing point because of prolonged production outages, export bans
etc, a trade is omitted from regional price points, or assessed in
relation to prices in similar regions.
Argus publishes prices that report and reflect prevailing levels for
open-market arms length transactions (please see the Argus Global
Compliance Policy for a detailed definition of arms length).

Spot, contract and formula pricing

Spot pricing refers to specific cargoes sold that are scheduled to
load prompt to 30-40 days forward from when the sale has taken
place. These prices are cash prices, i.e. net of any credit. Our
minimum lot is 5,000t of any particular product and we include lots/
holds placed in combination with other products on a vessel for
freight economics.
Contract pricing is split out from normal spot pricing and refers
to a significant sales volume spread over a minimum three-month
shipping period. This is most relevant for Indian DAP, phosphate
rock and phosphoric acid contract pricing.
On quarterly contract pricing, the Price Guide is adjusted when
prices for that relevant quarter have been agreed, not necessarily or
automatically at the beginning of that quarter.
Formula pricing is an arrangement where a buyer and seller agree
in advance on the price to be paid for a product delivered in the future, based upon a pre-determined calculation, sometimes utilising
published prices from Argus FMB and/or other publications. Given
that the exact nature of the calculation or the agreement between
the parties is often private and confidential, and if the deal is considered a one-off (i.e not repeatable) then calculated netbacks are
not used in formulation of a spot price range. However, if a buyer
and seller use this method of pricing for multiple transactions on a
specific trade route, then the editor may use the deal in formulating
a spot price range using current known cfr levels, domestic prices in
destination country and indicative freight rates.

19 January 2005
August 2014

Terms
Most transactions are conducted on a sight/cash basis, but where
credit terms apply, eg up to 180 days, these are taken into account
and subtracted from the price so that the published price is net of
credit or other terms. One exception is the quarterly phosphoric
acid price in India, which will usually include 30 days credit and is
quoted as such.

Units
All prices are assessed in US dollars/tonne ($/t), apart from US
domestic references, which are priced in short tons (st). The report
also includes a pricing reference for phosphoric acid that is expressed in $/t P2O5 (merchant grade phosphoric acid is shipped as
a 54% P2O5 solution). The phosphate Price Guide also includes a
reference price for US molten sulphur quarterly contracts cfr Tampa,
which are quoted in US long tons.

Lot and cargo sizes

For international trade, the minimum lot size used for consideration
and inclusion in the relevant price range is 5,000t of a particular
product (this includes part cargoes on larger vessels including other
fertilizers and for which the freight rate may be more favourable
although this will be explained in the text). The exception is prices
quoted in the US domestic market for which the price is indicative of
one barge, assumed to be carrying a minimum of 1,500st, with no
set maximum number of barges. There may be occasions when a
barge is loaded with less quantity for reasons of low draught levels,
but this will be explained fully in the text.
For the phosphates report, Argus FMB considers cargoes as follows typically short sea routes in Europe (for example from north
Africa) employ vessels of 5,000-6,000t. Deepsea voyages employ
handysize vessels and above:
Minimum 5,000t (for example Mediterranean vessels from north
Africa)
Handysize 10,000-35,000t (the majority of deepsea phosphate
trade)
Handymax (35,000-59,000t)
Panamax (60,000t plus)
In the US domestic phosphates market:
A typical barge on NOLA is 1,500st
A central Florida railcar is minimum 100st

Products and specifications

Diammonium phosphate (DAP) is a dry, bulk fertilizer containing 18pc nitrogen and 46pc phosphate by weight. It is produced
by combining ammonia with phosphoric acid and is widely used
in granular form for direct application to land or as a feedstock for
bulk blending for NPK manufacture. Prices are only assessed based
on deals concluded in the agricultural sector. Sales to the industrial

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Methodology and specifications guide

19 January 2005
August 2014

Price Guide How prices are defined

sector may be discussed in the text, but will not form part of the
assessment.
Monammonium phosphate (MAP) is a dry bulk fertilizer containing typically 10-11pc nitrogen and 50-52pc phosphate by weight. It
is also formulated by adding phosphoric acid to ammonia solution
and can be used for direct application or for use as a raw material in
bulk blending. Argus FMB assesses the MAP price for product with
minimum 50pc phosphate by weight and maximum 52pc. In the
case of Moroccan MAP with a 55pc phosphate content, the price
is recalculated and quoted based on the price for a 52pc equivalent product. The typical grade of MAP includes 10-50 and 11-52
MAP. Trade in each product is explained in the text. Other types of
product, particularly 11-44 MAP from China, are mentioned in the
text and prices reported.
Triple superphosphate (TSP) 46pc P2O5 (straight fertilizer i.e.
no N or K)
Single superphosphate (SSP) 21pc P2O5 (low analysis straight
fertilizer) is a low analysis fertilizer and international trade is thin
as most product is manufactured and consumed locally, particularly
in Brazil and India. Prices are quoted in specific country text sections as a guide.
Phosphoric acid 100pc P2O5 (as merchant grade 54pc P2O5
solution) usually quoted in terms of tonne P2O5, i.e. 100pc P2O5
content, although it is actually shipped in a 54pc concentration,
called merchant grade acid or phosphoric acid solution, for ease of
handling and storage. Phosphoric acid is a liquid, is highly corrosive
and dangerous and has to be shipped in stainless steel tankers.
Phosphate rock phosphate fertilizers are made from phosphate rock (calcium phosphate). This is mined as an ore either by
opencast (strip) or underground mining. Phosphate rock is present
in many countries, but is only present in commercially viable quantities in a few (Morocco has 80pc of global reserves). The phosphate
content or grade of phosphate rock is expressed as phosphorus
pentoxide (P2O5). In the phosphate industry and consequently
Argus FMB reports, the phosphate content of the rock is usually
expressed as tricalcium phosphate and traditionally referred to as
bone phosphate of lime (BPL) (P2O5 2.1853 = BPL). Manufacturers of phosphoric acid and phosphate fertilizers normally stipulate
a minimum content of 28pc P2O5, and most marketed grades of
phosphate rock contain more than 30pc P2O5 (65pc BPL). The
concentration of P2O5 in the rock determines its quality. The higher
the P2O5 content, the higher the rock quality. Phosphate rock is
washed and treated to remove impurities at the mine. It is then
processed through reaction with sulphuric acid to make phosphoric
acid. Phosphoric acid is the main intermediate product used to
make DAP, MAP, TSP and some compound fertilizers. The production of 1 tonne of phosphoric acid requires approximately 3.5 tonnes
of phosphate rock.

Spot prices
DAP/MAP/TSP fob bulk
DAP Tampa
Often considered the key benchmark price internationally, the price
is primarily defined basis what major US producer Mosaic sells from
Florida, plus sales by trader InterOceanic of Mississippi Phosphates
(MissPhos) material. Sales can also be made through other traders
with collated barge material from the domestic market.
With India no longer the main recipient of US DAP, Tampa is assessed based on reported sales by Mosaic, reported offers in Latin
America and theoretical netbacks to Tampa. Netbacks from shipments of US product to Mosaics distributions systems offshore are
not currently included in the range. But in times of extreme illiquidity,
the editor may refer to those in the text and reserves the right to
define Tampa basis netbacks from such repeatable and substantial
shipments. At the time of the latest revision of this methodology
Mosaic had not sold any DAP to India but sales to private buyers
may be netted back based on known cfr levels within India at the
time. This also reflects the potentially high percentage of the Tampa
line up moving to India and other distribution channels, particularly
Brazil following the acquisition of ADMs distribution assets in Brazil
earlier in 2014.
Contract DAP shipments to Japan, Australia and Canada are also
concluded on a contractual basis and not included, although if prices are discovered, the netbacks on such business may be included
in the text of the report. The majority of spot business is done in
Latin America predominantly Brazil and Mexico. The range is
assessed basis conversations with all traders active, Mosaic and
buyers where identified.
If there is a lack of liquidity, the market is assessed based on what
is achievable in traditional export markets, particularly those in Latin
America and netting back to Tampa using accurate freight rates,
taking into account the US export line up and whether there is pressure to sell for export. If the line-up is strong, US stocks are deemed
to be low, and sellers are not aggressively pushing product, then
potential netbacks in Latin America are of less relevance, and the
range is usually unchanged. The domestic price is also taken into
account as if this is higher than the export Tampa price, then there
is an argument that sellers can achieve a better netback in the
domestic market relative to export, hence the propensity to export
will be less. But the corollary is that the export market can provide a
volume market that the domestic market may not. So sellers will still
export volume tonnages even if the domestic market offers a better
netback.
DAP Tunisia
The Tunisian DAP price is usually defined on sales to southern Europe (France and Italy), Turkey and Latin America. Groupe Chimique

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Methodology and specifications guide

Tunisien (GCT) is the producer but its output has been highly erratic
ever since the outbreak of political unrest that sparked the Arab
Spring uprising in 2011. As a result, production has been uneven,
and many traditional export markets such as India have effectively
been ignored. GCT also sells occasionally to Latin America and
Pakistan. Turkey is the main recipient in the third quarter. Sales to
Bangladesh are formula-based. Argus FMB defines prices based on
consultation with GCT, traders taking positions on Tunisian product,
and buyers in end user markets particularly Turkey, Italy and France.
DAP Morocco
This is defined on sales made by Office Cherifiens des Phosphates
(OCP) to Latin American, African, European and occasionally other
spot markets such as Pakistan. The OCP export pattern is varied
and diverse. In Europe, the main markets are France and Italy while
in Latin America OCP has joint-venture agreements with major
buyers in Brazil and Argentina. It also has a strong presence in
African markets thanks to historical links and geographical proximity
Ethiopia and Kenya are major recipients. There are additionally
contract markets in Thailand and Bangladesh that do not form part
of the spot assessment, although netbacks from this business are
mentioned in the text where possible. Argus FMB speaks with OCP
and traders taking positions on product. It speaks with traders and
importers in all these key import regions. In Ethiopia, awards are
typically made against AISE tenders, and netbacks are calculated
basis a known set of associated costs.
In Europe, the OCP DAP price is closely allied to the GCT price,
such as in Italy (where GCT has a $5-6/t freight advantage being
closer to Italy versus Morocco). Prices are defined on consultation
with OCP, traders taking positions, cfr prices in end user markets
and buyers in key end user markets including Brazil and Argentina.
If OCP decides to ship multiple cargoes under formula to certain
markets such as the US, netbacks to Morocco may be calculated
on current domestic prices in the US market. This increasingly may
be the case following the May 2014 announcement that OCP would
supply PotashCorp (PCS) in the US with finished phosphates in the
North American market.
DAP Baltic/Black Sea
Most DAP from Russia is now exported out of the Baltic Europe
(particularly northern Europe Belgium and Germany), North
America, the US, Argentina, Brazil, Ethiopia, Iran, Turkey and Pakistan. Comparatively little is exported from the Black Sea and then
only to the Turkish market and other parts of central Europe traders may take product to Romania or Croatia. Argus FMB will consult
with the main producers, PhosAgro, EuroChem and UralChem, to
ascertain prices. It will also liaise with traders that lift Russian product. In some cases, netbacks are calculated on specific awards in
tenders. End user buyers in these markets are also consulted. Typically the high end of the range is defined on regional sales to central
and eastern Europe, with netbacks from deepsea markets such as
Latin America forming the low end. In January 2014, PhosAgro said
it would no longer export DAP to India, favouring more geographically closer MAP and NPK markets in central and eastern Europe.

19 January 2005
August 2014

DAP exported from Russia to the EU is subject to a 6.5pc duty from

1 January 2014, up from 3pc previously. This tends to drag down
the netback on Russian DAP prices to northwest Europe. But Lithuanian exports are not subject to this duty and netbacks are accordingly higher this is reflected in published ranges.
DAP China
For a large part of the year (January to mid-May and mid-October to
December) Chinese DAP is subject to an export tax in order to limit
exports and to protect supply to the domestic market. But excessive capacity building means this is no longer a major problem.
Accordingly, in 2013 the legislation was relaxed for exports from
2014 onwards, which has resulted in a significant growth in exports
outside the lower tax window. The export tax regime for the coming
year is usually announced in December and is subject to numerous
revisions. This will be highlighted in the text. Material is also moved
from bonded warehouses during the higher tax period. China mainly
exports to India either directly or through traders or to other southeast Asian markets, particularly Vietnam and Thailand.
The DAP fob level out of China is determined partly by domestic
prices, whether better netbacks are achievable in the domestic
market relative to the export market (and allowing for the tax) and
what is achievable in the export market, particularly southeast Asia
and India. China exports to Bangladesh, Pakistan, India, Japan
(contract), Thailand and Vietnam. Private-sector importers in Bangladesh usually pay a price premium for DAP and this is reflected in
the range once confirmation is received from the parties involved.
Argus FMB speaks with key Chinese exporting producers Kailin,
Wengfu and Yuntianhua, traders active in China and southeast Asia
generally.
DAP Saudi Arabia (KSA)
This price is determined basis consultation with Sabic and Maaden,
which markets Maaden Phosphate product (most is sold to India
under contract but cargoes are priced individually according to
market conditions). Other markets have been Pakistan, South Africa
and Thailand. Recently, Sabic was awarded the full tender volume
in Ethiopia, and Argus FMB calculates a spot fob value basis cfrlo
bagged terms minus the associated estimation of costs. The low
end is usually the netback on spot sales to India. Freight is estimated at $10-15/t to the west coast of India. Argus FMB also speaks to
end user buyers to confirm cfr values and traders who occasionally
lift product for specific markets, for example Bangladesh. Southeast
Asian traders are consulted for business to Thailand.
DAP Mexico
Mexican DAP is traded through American Fertilizer Trade (AFT). The
producer switches between DAP and MAP dependent on market
conditions. It exports out of Lazaro Cardenas on the west coast so
has a natural freight advantage to west coast Latin America as well
as southeast Asia and Australia (the latter mainly for MAP). AFT has
sold to India in the past but not for the last two years owing to better
netbacks in the domestic and Latin American markets, especially

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Methodology and specifications guide

19 January 2005
August 2014

for MAP. US DAP is at a $5/t freight advantage relative to Mexican

DAP on the east coast as it avoids the Panama Canal. But conversely, Mexican DAP is more economical to the west coast of Latin
America. A considerable amount goes domestically. As regards
exports, AFT exports to Chile, Colombia and Guatemala. Argus
FMB liaises with AFT, trading companies that take positions for Latin
American markets and end user buyers in these markets. Australian
business is usually predominantly contract-based, and not included
in the DAP Mexico spot range.

and UralChem form the range, although the latter has not been
producing since the first quarter of 2014 owing to rock supply
issues with PhosAgro a situation expected to remain for some
time. Numerous traders also take MAP from the Baltic and they are
consulted in formulation of the price. The main export destinations
for Russian MAP are northwest, central and eastern Europe, the US/
Canada, and especially Latin America (Brazil and Argentina). Turkey
is now also an increasing recipient owing to supply issues from
Tunisia.

DAP Australia

As with DAP, MAP ex-Russia is subject to a 6.5pc duty into EU markets and this brings down netbacks from these sales. Some MAP
ex-Lithuania can also make its way to northwest Europe, which is
not subject to the same tax and this is reflected in our range.

DAP exports out of Australia are currently completely under the

auspices of trading company Quantum, which exports DAP from
Townsville for Incitec Pivot. DAP is exported mainly to south Asia
Bangladesh, India and Pakistan. Exports are seasonal and begin in
April and slow in October as the domestic season kicks in. Argus
FMB will liaise with Quantum, plus trading companies in Bangladesh and buyers in Pakistan. Contract shipments to New Zealand
are not included but premium prices paid in Bangladesh are incorporated into the range.
DAP US Gulf domestic barge
This is assessed in London after due consultation with our Houston
office. The price is assessed basis deals done in the US domestic
market from consultation with multiple traders and buyers as well
as the main producers and international traders with an interest in
exporting to the US. The market is fairly liquid with several deals
reportedly usually in a week. Prices are assessed basis these deals
and expressed in $/st New Orleans (Nola).
DAP Central Florida railcar
This is assessed in London after due consultation with our Houston
office on railcar business for 100st cars. The price is assessed basis
deals done in the US domestic market from consultation with multiple traders and buyers as well as the main producers. The market is
relatively illiquid compared with the barge market.
DAP China ex-works
This price is the ex-works factory price in the domestic Chinese system. It is gleaned from conversations with the main producers and
Chinese traders. The price is then converted to a $/t basis using the
exchange rate pertinent on Thursday afternoon London time.
DAP Benelux fot/fob duty paid/duty free
This is the price quoted in the Benelux/port of Terneuzen region on
a fot basis. The price is assessed basis conversations with regional
importers, traders and buyers as well as Europe-based producers.

MAP Morocco
Defined by sales by OCP to European and Latin American markets
at the high and low end. Prices are given in 11-52 equivalent although OCP produces higher grade MAP. It usually trades at a $10/t
premium to DAP. MAP can also be defined on theoretical netbacks
from the US market if OCP ships MAP (sometimes in combination
with other phosphates) to that market. In May 2014 OCP signed an
agreement with PCS in the US/Canada to supply finished phosphates through PCS distribution system. The exact nature of this
deal has yet to become clear, especially in terms of volume but
Argus FMB may consider using netbacks from US domestic prices
in the MAP range, particularly when price discovery is limited in the
spot market. Often OCP will state that these are formula related
deals with traders, but if cargoes become repeatable, there is a
legitimate reason to base MAP prices on netbacks based on the
NOLA MAP barge price. Buyers in Brazil and Argentina and global
traders are also consulted. The major export destinations are Brazil,
where OCP has a major joint-venture agreement with key importers. There are significant exports to northwest Europe, the US, plus
contracts with buyers in New Zealand.
TSP Tunisia
This is defined on sales of Tunisian TSP from GCT. In recent months,
because of production having been impacted by civil unrest and
strikes as a result of the Arab Spring uprising in 2011, most product
has been moving under contract to Bangladesh priced on a formula
basis. The high end is basis sales to European markets but traditional markets mirror those of OCP Europe, Brazil, Africa, Iran
and Bangladesh. Some sales to the US are also made. The price
usually broadly tracks the Moroccan price. The shortage of product
means it usually goes to premium markets such as Bangladesh,
eastern Europe or western Europe. The price is assessed basis discussions with GCT, European and Bangladesh buyers, and traders
in end user markets particularly in Brazil.
TSP Morocco

MAP Baltic
The MAP price is represented by sales to European markets at the
high end and deepsea at the low. Sales by EuroChem, PhosAgro

This is defined as sales of TSP made by OCP in Morocco. The

range is defined on sales to Europe at the high end and deepsea
at the low end. The largest sales are to Brazil, Europe and Bang-

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Methodology and specifications guide

ladesh. Much of this is contract tonnage so prices are hard to

establish. Importers in Bangladesh, Brazil and global traders are
consulted as well as OCP.
TSP China
TSP is subject to a flat 5pc export tax all year round effective 1
January 2014. The price quoted is inclusive of this tax. Chinese
producers and Asian traders are consulted in formulation of the
assessment. Most TSP moves to the regional market especially
India, Indonesia and Bangladesh through traders and directly from
producers. There have also been major sales to Brazil usually
through traders and Iran.
TSP Eastern Med (Lebanon/Israel)
The price predominantly refers to Lebanese TSP, which is shipped
to the premium Bangladesh market but is also taken by traders for
various markets. LCC Lebanon, regional traders and global traders
are consulted in formulation of the price assessment. Israel mainly
exports to northwest Europe, the US and Brazil.
DAP/MAP cfr bulk Argentina/Uruguay
Argentina often pays a slight premium for MAP and prices are
generally higher compared with Brazil (owing to freight differentials). Product comes in typically from Russia, the US, China and
Morocco. Moroccan, Russian and US producers are consulted plus
US exporting traders. The main global traders are also consulted
as well as Argentina-based importers. Argentina imposes a 6pc
duty on DAP imports with less than 6ppm of arsenic. This tended to
favour US producers over their Russian and Saudi Arabian counterparts, but Russian producers have apparently alleviated this issue.
Uruguay does not impose such a duty. A myriad of traders, producers and importers active in the region are consulted to formulate the
range based on bids, offers and business concluded.
MAP Brazil

19 January 2005
August 2014

north Africa and Russia have largely exited the market as a result of
being uncompetitive in the region. Mosaic does still move tonnage to
its own distribution system in India estimated at 400,000-500,000
t/yr. The price is determined basis conversations with all the major
suppliers, active traders and importers. In addition, Argus FMB has a
dedicated editorial resource in Delhi who also provides insight.
DAP Pakistan
Pakistan quite often trades at a $10-15/t premium to India owing to
freight economics. Pakistan can source from most origins China,
Russia, Australia, Saudi Arabia and north Africa but is increasingly,
like India, the purview of Saudi and Chinese producers. Prices are
assessed basis discussions with traders who have reportedly sold
into Pakistan and major buyers.
NPK 16-16-16 bulk fob FSU
Prices are predominantly defined on sales of Acron, Rossosh and
Sumy (Ukrainian) material to southeast Asia and China. Argus FMB
assesses the price based on sales reported by major suppliers in
the former Soviet Union (FSU) and traders/buyers in southeast Asia
and China.
NPK 16-16-16 bulk cfr China
The price is assessed basis fob levels in the Baltic and freight rates
to China. Argus FMB liaises with producers and southeast Asian/
Chinese traders to confirm cfr levels.
NPK 16-16-16 bulk cfr SE Asia
The price is assessed basis fob levels in the Baltic and freight rates
to southeast Asia. Argus FMB liaises with producers and southeast
Asian/Chinese traders to confirm cfr levels.

Raw material contracts

Phosphoric acid/t P2O5

MAP is sourced from OCP Morocco, Russia, the US, Saudi Arabia
and China, so producers in all these countries are consulted in
formulation of the assessment. Global traders are also active and
are consulted. In addition, several Brazilian importers/buyers and
distributors are also consulted.
DAP India contract
The formulation of the Indian DAP price has undergone extensive
change over the last four years.Initially a contract price agreed
between major sellers and Indian buyers early in the second quarter,
the DAP price now is effectively a spot reference, as cargoes are
priced individually against longer frame volume contracts predominantly with Saudi and Chinese suppliers as well as JPMC
Jordan. Other producers do occasionally sell to India, and Mosaic
has a distribution system there, but most traditional exporters have
withdrawn from this market given its recent currency volatility and
uncertain subsidy situation. Traditional suppliers west of Suez and in

Cfr India
The phosphoric acid price is settled as a quarterly contract, with
price negotiations led by OCP Morocco South Africa, Tunisia and
other suppliers follow suit. There may be some initial provisional
pricing by sellers prior to OCP agreeing a deal, and this is fully
explained in the text. The price is settled in $/t cfr P2O5 and is a
published transparent price. Argus speaks with the major supplier
OCP and Indian buyers to confirm the price. A DAP import parity
price is also calculated and this is discussed in the text.
Cfr Western Europe
Imports are predominantly from OCP Morocco (Belgium, France,
Netherlands, Spain) and GCT Tunisia. These prices are agreed on
a quarterly basis. Major buyers and the north African suppliers are
consulted to assess the range.

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Methodology and specifications guide

19 January 2005
August 2014

Ethics and compliance

Cfr Brazil
Another market dominated by Morocco, which supplies the vast
majority of phosphoric acid. Prices are settled on a quarterly basis.
OCP and Brazilian buyers are consulted in formulating the price.
Phosphate rock (% BPL)
Fob Jordan (68-70)
Jordan is a major phosphate rock exporter, the vast majority of
which goes to India under contract. It additionally exports smaller
quantities to Indonesia and Turkey. Argus FMB attempts to speak to
JPMC (the major producer and supplier) and to Indian importers to
assess the range.
Cfr India (68-70)
India sources a massive amount of phosphate rock from various
sources to feed its domestic DAP and phosphate production programme. It buys rock from Egypt, Israel, Morocco and Togo but the
largest supplier is Jordan, which provides 50pc of the total requirement. Argus speaks to Indian importers and major suppliers JPMC
and OCP.

Argus operates according to best practices in the publishing field

and maintains thorough compliance procedures throughout the
firm. We are a preferred supplier to our subscribers, who are held
to equally high standards, while at the same time maintaining our
editorial integrity and independence.
Argus has a strict ethics policy that applies to all staff. The policy
can be found on our website at www.argusmedia.com. Included in
this policy are restrictions on staff trading in any commodity covered
by Argus or equities in any companies engaged in those industries,
as well as guidelines on accepting gifts and hospitality.
Argus also has strict policies regarding archiving of email, IM and
personal notes of conversations by telephone between its editors
and industry contacts. This archiving process involves:
- Detailed notes of telephone conversations including name of
contact, company name and time of call
- Subsequent description of how price range was derived

Corrections to assessments
Argus will on occasion publish corrections to price assessments
after the publication date. We will correct errors that arise from:

Cfr India (70-72)

Argus speaks to Indian importers and major suppliers to formulate
the range.

- Clerical mistakes
- Miscalculation
- Misapplication of stated methodology

Fob North Africa (69pc)

Defined on netbacks from Indian business to sales to European
markets such as Belgium, Norway, Spain, Poland, Lithuania as
well as Brazil. Argus liaises with OCP, GCT traders handling rock to
Europe, Brazilian buyers and European NPK producers.

As detailed above, we will not retrospectively assess market prices

based on new information learned after assessments are published.
We make a concerted, best effort to assess markets based on information gleaned during the trading period assessed.

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