India Urea Imports Cost Drop, Easing Fertilizer Subsidy
By Business Desk
India’s urea import costs have significantly decreased following RCF’s latest tender, offering substantial relief to the nation’s fertilizer subsidy bill.
India is poised for significant relief in its substantial fertilizer subsidy bill as urea import costs fall sharply. The latest tender from state-run Rashtriya Chemicals and Fertilizers (RCF) has secured the crucial soil nutrient at considerably lower prices.
Key Tender Details Emerge
- RCF’s recent tender for 1.7 million tonnes of urea drew bids ranging from $390-431 per tonne.
- This represents a notable reduction from the $444-605 per tonne seen in its previous June bid.
- Prices had previously peaked at $959 per tonne following the West Asia crisis.
The decline in global urea prices began in May, reversing an earlier surge. This market shift is directly attributed to importing countries actively seeking more affordable nitrogen fertilizer alternatives.
India’s Urea Consumption and Subsidy
- India stands as the world’s largest importer of urea.
- Urea accounts for 45% of the country’s total fertilizer consumption.
- The government heavily subsidizes urea, selling it to farmers at nearly 90% below market rates.
While approximately 40% of India’s annual urea imports were procured at elevated prices post-crisis, subsequent purchases are now expected to benefit from these newly reduced rates. This development offers much-needed financial respite for the nation’s fertilizer subsidy program.