Key facts
- India's urea import costs may fall by up to 50% before the kharif season.
- Offers in a recent tender were between $444.90 and $617 a ton, significantly lower than April's prices.
- Eased supply from China and weakening global demand are contributing factors.
- India is increasing spot market purchases of liquefied natural gas for domestic urea production.
- Current urea inventories are 19.8 million tons against a monsoon season requirement of 38.4 million tons.
India's urea import costs are poised to fall by as much as 50% before the upcoming kharif season, signaling an easing of global fertilizer supply strains. Offers in a recent tender by National Fertilizers Ltd. ranged between $444.90 and $617 a ton, significantly lower than the $935 to $959 per ton paid in April.
This price drop is attributed to eased supply from China and weakening global demand, as farmers face lackluster grain prices. The disruption of trade routes, particularly through the Strait of Hormuz, had previously driven up fertilizer costs. India, a major urea importer, relies on global tenders to meet its deficit, especially during the monsoon sowing season for crops like rice, corn, and soybeans.
Despite the easing import costs, India is increasing its purchases of liquefied natural gas on the spot market to support domestic urea production, a key feedstock. Spot LNG prices are currently higher than long-term contract prices. Current urea inventories stand at approximately 19.8 million tons, against a total requirement of 38.4 million tons for the June-September rainy season.