Saudi Arabia
India Offtake Agreement
India has signed a landmark five-year supply agreement with Saudi Arabia’s Ma’aden to secure 3.1 million tonnes per annum of DAP and NPS fertilizers, with an optional five-year extension, a deal that reconfigures global phosphate trade flows.
The agreement was finalized during Indian Chemicals and Fertilisers Minister J.P. Nadda’s visit to Riyadh and signed by major Indian buyers IPL, KRIBHCO, and Coromandel International. It comes in direct response to China’s 26 June suspension of phosphate and specialty fertilizer exports, which had threatened to disrupt India’s Kharif season and expose vulnerabilities in its supply chain.
Key Deal Details
Volume: 3.1 million tonnes/year (DAP and NPS)
Duration: 5 years, with option to extend another 5
Participants: Ma’aden (Saudi Arabia); IPL, KRIBHCO, CIL, and other entities
Pricing: Spot basis, no change from current practice
Share: Around 90% of the tonnes is expected to be supplied by Ma’aden
Strategic Add-ons: Includes joint working group for fertilizer R&D, product customization, and bilateral investment cooperation.
Market Impact & Strategic Implications
Reduced Indian spot DAP demand: With a large portion of India’s import requirement now covered under term supply, spot and short-term tender volumes may decline.
Tighter availability from Saudi Arabia: Ma’aden’s term obligations could reduce volumes available for spot sales, possibly supporting stronger FOB KSA pricing going forward.
Weakened Chinese phosphate footprint: China's role in India’s phosphate supply is expected to diminish significantly. With Indian DAP inventories at just 1.56m tonnes in early July, the deal came just in time to head off critical shortfalls.
Wider trade ripple effects: Spot Buyers in Southeast Asia, and Brazil may face tighter DAP availability and firmer offers as India locks in long-term offtake volumes.
India DAP Imports’ history [in million tonnes], 2024 DAP imports market shares by Origin [ in %]
What about Africa?
Saudi producer Ma’aden remains a critical supplier of phosphate fertilizers to Eastern and Southern Africa. While the new multi-year agreement with India represents a significant allocation of volumes, it does not imply reduced availability for African markets. However, it does signal the need for regional buyers to adapt; securing supply will increasingly require forward planning, structured procurement strategies, and long-term volume commitments. Buyers in East and Southern Africa may need to move away from short-term, opportunistic purchases toward advance booking and demand aggregation to avoid future disruptions.
AFRIQOM Market Reporter
