India Secures Urea Imports at Steep Discount

India has successfully secured 1.7 million tonnes of urea imports at significantly reduced prices, ranging from $390.25-$393.65 per tonne. This marks a steep discount compared to earlier tenders this fiscal year.

• Quantity secured: 1.7 million tonnes
• New price range: $390.25-$393.65 per tonne
• Previous tender prices: $444.9-$449.3 and $935-$959 per tonne
• Tender floated by: Rashtriya Chemicals and Fertilizers (RCF)
• Total bids received: Over 5.5 million tonnes
• Offered quantity: 1.7 million tonnes

The international tender, issued by state-run Rashtriya Chemicals and Fertilizers (RCF) on July 29, attracted bids totaling over 5.5 million tonnes, significantly exceeding the 1.7 million tonnes offered. The contract was strategically divided, allocating 1 million tonnes for western coast ports and 0.7 million tonnes for eastern coast ports. Switzerland-based Ameropa Group emerged as the lowest bidder for both legs of the contract.

Factors Driving Price Reduction

This sharp decline in global urea prices is primarily attributed to an easing of the energy-linked supply shock that previously impacted West Asia. Concurrently, a substantial build-up of surplus urea stock in China has contributed to increased availability. Additionally, more Iranian material is reportedly reaching global markets through China.

These more affordable imports are projected to ensure a comfortable supply of urea for India’s ongoing kharif and the upcoming rabi sowing seasons. Both urea imports and domestic production recorded an increase between April and June this year, compared to the same period last year. The government has also diversified its sourcing of liquefied natural gas, a vital input for local urea manufacturing, following disruptions from Qatar and Saudi Arabia.