As expected, India is back with another urea purchasing tender. The terms are as follows: offers are due on 23rd January, shipment is required by 5th March, and the targeted volumes are 1 million tonnes to WCI and 0.5 million tonnes to ECI. Let’s make a brief analysis.

Indian stocks currently stand at 5-6 million tonnes. This is a normal level and, I would even say, “sufficient” when compared to the country’s DAP stocks, which are just 1 million tonnes.

The last tender, excluding the mistakenly offered cargo at $299 per metric tonne, was concluded at $369.75 per metric tonne CFR WCI. I can only speculate on the prices this time, but I doubt I’m wrong in estimating that we may see a level of $410 per metric tonne CFR. That’s $40 per metric tonne higher, or in absolute terms, an additional $60 million if the entire declared quantity of 1.5 million tonnes is concluded.

Can India afford to buy less this time? I believe they can. Will they do it? Most probably not, and there’s another significant reason beyond the supply and demand situation. This tender appears to be the final one for the 2024/2025 fiscal year, meaning that funds allocated for urea purchases must be spent to justify next year’s budget allocation.

This is, of course, just my personal opinion, and I’d be delighted to hear your thoughts.

Wishing everyone a great week ahead!

#analysis #urea #india #imstory #market #supply #demand #thoughts #market #fertilizers #fertilisers #dap