MUMBAI: Indian Potash Ltd has received offers to supply urea at around $1,000 per metric ton in its latest tender, nearly double the price achieved two months ago, after supplies were disrupted by the U.S.-Israeli conflict with Iran, two company sources said.
Indian buying at these levels was likely to increase global urea prices in spot markets and force smaller buyers in Asia and Africa to pay more for the crop nutrient needed to sustain crop productivity, industry officials said.
India, the world’s biggest importer of urea, issued the tender earlier this month to secure 2.5 million tons of the fertiliser, or nearly a quarter of its annual imports of about 10 million tons in 2025.
The lowest offer to supply urea on the west coast was $935 per ton on a cost-and-freight basis, while the lowest offer for the east coast was $959 per ton, the sources said.
India seeks 2.5 million metric tons of urea amid Middle East supply disruptions
MOST BIDS ARE AROUND $1,000
Indian Potash Limited received offers to supply 5.6 million tons of urea in the tender, with only a small portion priced at $935 a ton, while most bids clustered around $1,000 and climbed as high as $1,136, the sources said.
In the previous urea tender issued by India’s Rashtriya Chemicals and Fertilizers, bids were $508 per ton for west coast delivery and $512 per ton for east coast delivery, the sources said.
IPL, in the latest tender, sought 1.5 million tons via the country’s west coast, while the remaining 1 million tons will be shipped through the east coast. Shipments are expected to depart from load ports by June 14, it said.
One company official speaking on condition of anonymity because he was not authorised to speak to the press said IPL would ask all bidders to match the lowest price offered in the tender and would make a decision depending on the sellers’ response.
There is a need for urea, but that does not mean India will allow exporters to price the product at exorbitant levels, the official said.
India, where farming is a mainstay, imports urea as well as liquefied natural gas, a feedstock for making the fertiliser, from Oman, Qatar, the United Arab Emirates, Russia and China.
India’s urea production fell last month due to limited gas availability following the start of the Middle East conflict. Shipping disruptions delayed some shipments from earlier contracts.
A Mumbai-based industry official, who also asked not to be named, said that if purchases at these prices exceeded 1 million tons, that would be enough to inflate the global market.
It would also have implications for India’s subsidy bill as farmers’ urea supplies are subsidised.
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