India likely to boost urea imports beyond 17 LT as tender prices plunge over 50%
Fertiliser economics, a sneaky but scoring GK area. Global urea prices have crashed more than 50 percent compared to the last tender, even falling below pre-Ukraine-war levels, so India is likely to let National Fertilizers Ltd import well beyond its original 17 lakh tonne tender. Bids came in around 445 to 449 dollars a tonne. Here's the thing, India imports a big share of its urea, and cheaper imports cut the government's fertiliser subsidy bill, which matters for the fiscal deficit. China, a major supplier, is hesitating to sell at these low rates. Bottom line for the exam, remember NFL's 17 lakh tonne tender and the 50 percent price crash.
The government is likely to clear NFL to import urea well beyond its original 17-lakh-tonne (lt) tender. Bids opened on June 8 revealed prices that are significantly lower than the previous round held by Indian Potash Ltd (IPL), even dropping below pre-war levels.
Following significantly lower-than-expected bids for National Fertilizer Ltd (NFL)’s recent 1.7-million-tonne urea import tender, theIndiangovernment is reportedly weighing plans to increase its purchase volume, provided suppliers match the current rates. Opened on June 8, the latest tender prices have plunged over 50% compared to Indian Potash’s (IPL) previous round, even dropping below pre-Ukraine-war levels.
However, this price crash is rattling major global suppliers. After announcing plans in May to resume urea exports in hopes of a market rally, China is now reportedly reconsidering. “Our Beijing representative indicates that China is reluctant to sell at these depressed rates,” noted a tender participant, adding that while the final decision rests with the lowest (L1) bidder, clearer market signals are expected later this evening.
The government is likely to clear NFL to import urea well beyond its original 17-lakh-tonne (lt) tender. Bids opened on June 8 revealed prices that are significantly lower than the previous round held by Indian Potash Ltd (IPL), even dropping below pre-war levels.
For the NFL tender, the lowest bids came in at $449 per tonne for west coast delivery and $445 per tonne for the east coast. This marks a massive drop from April, when the government agreed to import 25 lt of urea after IPL received lowest bids of $935 per tonne (west coast) and $959 per tonne (east coast). For comparison, prior to the war against Iran, public sector RCF had received mid-February offers for 1 million tonnes (mt) of imported urea at $508 (west coast) and $512 (east coast).
“The government is likely to enhance the quantity (from current 17 lt) if the other suppliers agree to L1 rates as India needs more Urea even for Rabi season as sales have increased in April-May due to panic buying,” an official source said.
Ameropa Asia submitted the lowest west coast bid at $449.30 per tonne for 2.34 lt. Sources note that if the government decides to exceed its 9 lt west coast target, the L1 bidder will get the first opportunity to supply the entire enhanced volume. If they decline, other participating companies will be asked to match the L1 rate in order of their bid rankings.
Similarly, Aditya Birla Global Trading (ABGT) hit the lowest east coast mark at $444.90 per tonne for 5 lt. Should the government expand procurement beyond the initial 8 lt for the east coast, other companies will likewise be asked to match ABGT’s L1 offer if ABGT declines to supply the entire extra volume.