- India secured 17 lakh tonnes of urea at $390.25-$393.65 per tonne
- Prices dropped from earlier tenders priced at $444.9-$959 per tonne
- Ameropa Group won the tender for 10 lakh tonnes at west ports
India has locked in imports of 17 lakh tonnes of urea at significantly reduced prices, a move expected to ease fertiliser availability for farmers ahead of the rabi sowing season.
Sharp Price Fall From Earlier Tenders
The consignment was secured at landed prices of $390.25-$393.65 a tonne through an international tender floated by state-run Rashtriya Chemicals and Fertilizers (RCF) on July 29, with bids opened on August 11 and finalised this past week, according to a report in The Indian Express.
The report noted that these rates are far below the $444.9-449.3 and $935-959 price bands seen in earlier import tenders this fiscal, marking one of the steepest declines in recent contracts.
The tender, split between 10 lakh tonnes for western coast ports and 7 lakh tonnes for the east, drew bids totalling over 55 lakh tonnes, well above the quantity on offer.
Switzerland-based Ameropa Group emerged as the lowest bidder on both legs of the contract.
ALSO READ: Cost Of Cheap Urea: India's Fertiliser Strategy Under Strain As Subsidy Burden Mounts
Global Supply Easing Behind The Drop
The fall in prices attribue to two broader trends: an easing of the energy-linked supply shock that had gripped West Asia earlier this year, and a build-up of surplus urea stock in China, where in-plant inventories were running significantly higher than a year ago.
The report also cited an industry source who pointed to Iranian material increasingly reaching global markets via China.
Imports And Domestic Output Both Rise
According to Fertiliser Association of India data,the urea imports between April and June this year were sharply higher than the same period last year, while domestic production also posted an increase over the same window.
The government had worked to diversify sourcing of liquefied natural gas, a key input for domestic urea manufacturing, after supplies from Qatar and Saudi Arabia nearly dried up following the closure of the Strait of Hormuz, with alternative volumes contracted from countries including the US, Oman and Indonesia.
While urea supply remains comfortable for both the ongoing kharif and upcoming rabi seasons, availability of di-ammonium phosphate and other complex fertilisers continues to be a concern, as similar import diversification has not been achieved for their raw materials.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
