Phosphate, 29 October 2026: a 456,000t contract with no CIQ cargo behind it, and the DAP-MAP spread that just inverted in the US

China signed a government-to-government contract earlier this month to supply Bangladesh with up to 456,000t of DAP between October 2026 and January 2027. Minimum 280,000t, an option on a further 160,000t with a 10pc tolerance, priced on a formula.

There is still not one CIQ-approved DAP cargo in China.

That is the whole phosphate market in two sentences. The obligation exists, the paperwork does not, and the global market has started to price the absence rather than the contract.

What the contract is actually worth

Read the terms carefully, because they explain why nobody has moved.

The shipment window runs October to January. That is four months, and eight weeks of it have already gone. The minimum commitment is 280,000t over a period when Chinese producers are running DAP at 45.21pc of capacity across Hubei, Guizhou and Yunnan, down 0.66 points on the week, with MAP at 36.27pc, down 3.25 points. Those are not the operating rates of a country preparing to export half a million tonnes.

Pricing is on a formula. A formula-priced contract removes the negotiation, not the risk: it transfers the settlement to a reference that does not exist until cargoes start moving. And the tonnage is described as “up to” 456,000t, with the mandatory element at 280,000t — a structure that lets both sides walk the commitment down without breaching it.

Market participants expect Chinese DAP and MAP exports to remain halted for the rest of this year, with producers prioritising domestic supply. The Chinese domestic market is not short: DAP ex-works in Hubei held at ¥4,600-4,700/t and Yunnan at around ¥4,500/t, unchanged, on weak demand and a winter storage programme that has not started buying yet.

So the honest read is this: China has promised tonnage it has not yet been permitted to ship, into a market that has already discounted Chinese supply to zero. When and if the first CIQ cargo clears, the DAP price does not fall by 456,000t. It falls by however much the market was wrong about the delay. Those are very different numbers, and the second one is smaller.

DAP is for sale. MAP is not.

The price action this week splits cleanly along that line.

DAP fell. China fob dropped $22/t at the high end to $870-885/t, down $11/t on the midpoint. Southeast Asia slid from $900-950/t cfr to $900-920/t cfr, and traders now say $950/t cfr is no longer achievable in the region. India fell $7.50/t to $883-900/t cfr. Pakistan fell $6.50/t to $890-900/t cfr. The DAP index eased 0.78 points.

MAP held. China MAP 11-52 was unchanged at $790-815/t fob, 10-50 unchanged at $740-770/t, 11-44 unchanged at $670-697/t. Brazil MAP 11-52 held at $830-850/t cfr. The reason given is not strong demand. It is the absence of offers: no fresh offers, bids or deals were reported, because producers are holding limited CIQ-approved material.

A market with no offers does not print a lower price. It prints no price, and the last assessment stands. That is what “MAP holding” means in a week when DAP is being cut — not that MAP is strong, but that MAP is unobservable.

The one place MAP did move tells you where the real tightness is. MAP Morocco fell $30/t at the high end to $822-880/t. MAP Saudi Arabia rose $5.50/t to $812-858/t, and US Gulf MAP barges rose $6.25/st to $818-830/st.

The US just inverted the spread

Here is the number worth writing down.

US Gulf domestic barges were assessed at $795-800/st for DAP and $818-830/st for MAP.

MAP is $23-30/st above DAP — roughly $25-33/t. In most markets the relationship runs the other way, because DAP carries more P2O5 per tonne and is the default import grade. An inversion is not a subtle signal. It means one product is short and the other is not, and the market is paying to fix the shortage rather than to own the nutrient.

The cause is domestic, not global. MAP is the grade US blenders want for fall and spring booking, and MAP barges traded up while DAP barges fell $5/st. Add the November Tampa ammonia settlement at $640/t, up $95/t on October — the first monthly increase after five consecutive declines — and the US granulator has both a feedstock reason and a seasonal reason to bid MAP.

The lesson for an importer is directional and uncomfortable: the US is short MAP and long DAP, and it will pay a premium for the first while discounting the second. Anyone quoting a single “phosphate price” this week is quoting an average of two markets that have stopped agreeing.

India is waiting for a subsidy, not a price

Indian DAP was assessed at $883-900/t cfr, and the low end is being set by buyer and trader targets in the $880s. Offers frame the top: Saudi Arabian DAP at $900-902/t cfr.

Nothing traded. Activity was muted ahead of Diwali, and the market is waiting on the government’s rabi nutrient-based subsidy announcement. Until the subsidy level is known, an importer cannot compute a retail price, and an importer who cannot compute a retail price does not bid.

The physical picture is quietly tightening. Port inventories fell to 621,000t of DAP on 26 October, from 687,000t a week earlier — a 66,000t draw in seven days. That is roughly two weeks of Indian consumption. Stocks can fall for a while before anyone panics, but they cannot fall at 66,000t a week for a quarter.

And the arithmetic still does not close. Chinese DAP at $870-885/t fob, freight China-India at $25-37/t, and an Indian bid in the $880s: Chinese material only works if it is bought at the bottom of the fob range and shipped on the cheapest available vessel. Until one of those two things happens there is nothing to negotiate, which is exactly why the tenders keep getting scrapped — HURL’s 50,000t was scrapped on 5 October, awarded on 9 October, and the market has been waiting since.

RCF’s long-term DAP and MAP enquiry closes 14 November. If India re-enters this quarter, that is the document that says so.

Cost relief that stops at the ammonia line

The cost story has a clean split, and the split explains the European price structure.

Falling: sulphur into North Africa settled at $845-900/t for Q4 against $990-1,010/t in Q3, a drop of $127.50/t. Tampa sulphur fell to $615/t from $705/t. Hubei 28pc phosphate rock fell ¥80/t to ¥870-900/t delivered, and Indian rock imports eased across all grades.

Rising: the Tampa ammonia contract for November at $640/t, up $95/t. Global spot ammonia firm.

Flat: the Indian fourth-quarter phosphoric acid contract at $1,700/t P2O5, unchanged.

Net, the average imported ammonia-and-sulphur cost of producing DAP eased to $469.05/t in China, $478.11/t in India and $482.79/t in North Africa. That is real relief, and it is why DAP has room to fall.

But a European granulator buying merchant acid is not getting it. Benelux DAP sits at $954-960/t and Romanian bagged DAP at $980-1,020/t, both far above Chinese fob, and Benelux fell only $5/t this week. The European producer’s input is acid, and acid did not fall. Anyone arguing “sulphur is down $127, DAP must follow” is quoting half the cost curve and ignoring the half that matters to the seller they are actually competing against.

Meanwhile Chinese purified phosphoric acid fell another $30/t to $1,255-1,275/t for industrial grade and $1,270-1,290/t for food grade, on competition between suppliers and a continued CIQ suspension on industrial and merchant-grade acid exports. Chinese acid is getting cheaper because it cannot leave the country. That is not a global cost signal either.

Logistics are tightening from both ends

Two structural constraints are worth flagging because neither shows up in a price today and both will.

Russia is deepening rail cuts to Baltic ports — a further 25-35pc reduction in November against average monthly levels, up from 25pc in October. Fertilizer that cannot reach a Baltic terminal cannot be offered, whatever the fob assessment says.

Ukraine’s agricultural logistics remain bottlenecked, which is suppressing farmers’ ability to buy fertilizer at all. Grain supply is tight; if logistics ease, cheap Black Sea grain returns to the global market and takes crop economics with it. That is a demand risk in both directions, and it is unscheduled.

What to watch

6-8 November, Wuhan. The CPFIA conference is where Chinese producers will say out loud whether domestic sentiment is improving ahead of winter storage. If it does, the export halt gets longer, not shorter, because domestic sales at ¥4,600/t ex-works beat an export netback that requires CIQ approval.

14 November, RCF. India’s long-term DAP and MAP enquiry. Watch the volume as much as the price — a long-term award signals India intends to cover the rabi season forward rather than hand-to-mouth.

The first CIQ-approved Chinese cargo. Not the contract. The cargo. That single print reprices every DAP offer in Asia, and it is the only event on this calendar that moves the market in one direction quickly.

The US MAP-DAP inversion. If MAP holds above DAP through November, US blenders are genuinely short and imported MAP has a home at a premium. If it normalises, the inversion was a booking-window artefact and the global MAP premium has no floor under it.

Brazil’s MAP line-up into December. Brazil MAP held flat at $830-850/t cfr on no news, which is a price being carried by an absence of sellers rather than an excess of buyers. Watch whether December arrivals build the way ammonium sulfate arrivals have.

Prices as assessed on 29 October 2026. Market information from our own trading desks and trade sources; figures are indicative and move daily. Terms are quoted per inquiry and confirmed in the sales contract.