Agriculture and Chemicals: Crop & Chemical dashboard: March 2024

1 Apr 2024 , 11:22 AM

India’s DGTR was seen active in the last month as it imposed anti-dumping duty (ADD) on para-tertiary butyl phenol (positive for Vinati Organics) and initiated ADD investigation on imports of Suspension PVC (positive for Chemplast Sanmar), Aluminum foil (SRF) and Acetonitrile (alkyl amines and Balaji amines). On the agri commodities front, soybean prices were up 8% due to wet harvest in Argentina; while most of the global fertiliser remained stable, except DAP that rose 5% MoM; and ammonia that declined 7%. MRP of NPK 19-19-19 was seen rising by 6%. Bulk Chemicals like soda ash, TDI and bromine remained weak and there were no signs of uptick. Benzene and toluene prices were up 10% each QoQ; despite crude oil being down ~1%.

Global Agriculture update:

Corn and soybean prices are up ~5% each MoM. Brazil soybean, too, was up 8% due to a wet harvest in Argentina, dry weather in the western corn belt, Northern Plains and cut in production estimates by USDA. On the other hand, Brazil corn prices were down 9% MoM. Bloomberg Agriculture spot index rose 2% MoM; however, it remains lower by 17% YoY.

Weakness prevails in Agrochemicals:

Despite the increased activity of farmers in applying agrochemicals post the Chinese New Year, weak prices persist due to sufficient stocks of goods within the channel. However, there is a degree of stability in the prices now as destocking seems to have abated. Q2CY24 is critical, as distributors in North America will commence purchases.

Bulk Chemicals stay soft:

Despite a visible recovery in dyes and pigments, the improvement hasn’t yet translated into meaningfully higher realisations. In Q4FY24, caustic soda prices improved 8% QoQ; while soda ash prices remained under pressure and were down 4%. Acetic acid prices, too, declined ~15% QoQ. Benzene and toluene prices were up 10% each (crude oil down ~1% QoQ). TDI and bromine continued to witness softening in prices and were down ~8% each QoQ. Ref. gases viz. R134a, have seen an uptick in prices, owing to seasonality.

Spreads were largely weak:

Phenol spreads fell 27% QoQ to Rs37/kg, on the back of weak phenol pricing and firm benzene. PVC spreads, too, were down ~11% QoQ; while TDI and ethyl acetate spreads declined 6% each QoQ. Caprolactum-benzene spreads were also lower by 16% MoM. However, TAN spreads rose 74% QoQ, as key raw material ammonia declined 33%. DAP-phosphoric acid spreads for fertilisers were up 32% MoM, while para-cresol spreads were up 7% MoM. BOPET-PET spreads were seen rising 12%.

Low reservoir levels remain a concern:

Season-to-date rainfall (since 1-Jan-24) is ~5% below normal. Reservoir levels are below last-year levels and 10yr average. Reservoir levels in the South are at 24% lower vs last year and 10% pts lower than the 10yr average. All India reservoir levels remain at 40% lower vs last year’s level of 47%.

Other highlights:

1) Deepak Nitrite commences the manufacturing operation of the fluorination plant for the production of Benzo Trifluoride. 2) Nocil approves capex of not exceeding Rs2.5bn for capacity enhancement of rubber chemicals by 20%. 3) Deepak Fertilisers enters into an agreement to sell its vacant land in Navi Mumbai, Maharashtra to Future Realty for a consideration of Rs534mn. 4) TNPCB directed Coromandel Intl to remit Rs59.2mn, as environmental compensation for ammonia gas leakage. 5) Atul is in the process of launching Sindica; a novel, patented post-emergence herbicide for sugarcane. This will be a unique formulation with a combination of 2,4-D sodium, metribuzin and chlorimuron ethyl. 6) CPCB directs the closure of Paradeep’s Odisha plant for non-compliance with certain conditions prescribed by the Odisha State Pollution Control Board (OSPCB) in its ‘Consent to Operate’ letter. 7) Aether Inds commences the commercial operation at its Greenfield plant (site 4).