Blitz Bureau
NEW DELHI: India is set to import a record 2.5 million metric tonne of urea in a single tender, Government sources told Reuters, at nearly double the price paid two months ago, as the Iran conflict disrupts global supplies.
The record purchases, covering about a quarter of India’s annual imports, are set to tighten global supply and push prices higher, which have already surged due to the war in West Asia.
Indian Potash Ltd (IPL) has agreed to buy 1.5 million tonne of urea at $935 per tonne for delivery on the west coast, and an additional 1 million tonne at $959 per tonne for delivery on the east coast, the sources said, declining to be named as they were not authorised to speak to the media.
India, the world’s biggest urea importer, issued the tender earlier this month to secure 2.5 million tonne of the fertiliser, or nearly a quarter of its annual imports of about 10 million tonne in 2025.
Reuters had earlier reported that the lowest offer in the IPL import tender was $935 per tonne for west coast delivery on a cost-and-freight basis, and $959 per tonne for the east coast.
IPL received offers to supply 5.6 million tonne of urea in the tender, with only a small portion priced at $935 a tonne, while most bids clustered around $1,000 and climbed as high as $1,136.
IPL agreed to buy 2.5 million tonne of urea after suppliers matched the lowest bid.
“Many suppliers agreed to match the lowest bid offered for both west and east coast shipments, which is why the entire 2.5 million tonne purchase was possible,” one of the sources said.
Shipments under the tender must depart the load port by June 14, the tender document said.
In the previous urea tender issued by India’s Rashtriya Chemicals and Fertilizers, bids were $508 per tonne for west coast delivery and $512 per tonne for east coast delivery.
Higher import costs will push up India’s fertiliser subsidy bill, as the Government compensates fertiliser companies for selling crop nutrients to farmers at below-market prices.
India secured supplies, but other buyers are expected to scramble to secure fertiliser as producers have already committed shipments to India, said a Mumbai-based fertiliser industry official.