en.Wedoany.com Reported - India's state-owned National Fertilizers Limited (NFL) has received a lowest bid of $449 per tonne (CFR) in a procurement tender for 1.7 million tonnes of urea, a price less than half of the previous major import transaction in April. China's resumption of exports ahead of the autumn harvest and sowing season is the main reason for the sharp global decline in urea prices.
Bids announced on June 10 showed offers for cargoes destined for India's east and west coasts ranging from $445 to $449 per tonne (CFR). In comparison, Indian Potash Limited (IPL) settled at $935 per tonne (CFR) for the west coast and $959 per tonne (CFR) for the east coast in April for 2.5 million tonnes of urea, one of the largest single urea purchases in India's history.
The price collapse has brought unexpected relief to the Indian government. Earlier, the Middle East conflict drove up energy and nutrient costs, causing the country's fertilizer subsidy bill to balloon sharply. With the southwest monsoon now covering major Indian farming states, the timing is critical for the government—it must maintain urea supply at fixed retail prices while preventing soaring import costs from impacting the budget.
Traders largely attribute the price plunge to the return of Chinese exports. China restricted urea exports from March to ensure domestic supply and has since gradually resumed exports. The additional supply, coupled with weak demand in Brazil, Europe, and parts of Asia (where farmers purchase at market prices rather than subsidized rates), has shifted a market that was tight for most of the year toward a looser stance.
NFL issued the tender on May 27, seeking 900,000 tonnes for west coast ports and 800,000 tonnes for east coast ports, with shipments required by July 20. Suppliers submitted total offers of approximately 6.25 million tonnes, including about 3.17 million tonnes for the east coast and 3.08 million tonnes for the west coast, resulting in significant oversubscription. Aditya Birla Global Trading was among the bidders offering the lowest price for the east coast.
India caps the retail price of urea at 242 rupees per 50-kg bag (about $60 per tonne) and absorbs the difference between this price and import costs through subsidies. The federal budget for fiscal year 2026-27 allocated approximately 1.71 trillion rupees (about $20 billion) for fertilizer subsidies. After the Iran conflict drove up prices, finance ministry officials warned that the subsidy bill could double to over 3.4 trillion rupees (about $41 billion). The latest tender results indicate that the worst-case scenario is easing.
India imports about 10 million tonnes of urea annually. According to a report by the Indian Council for Research on International Economic Relations, India imported approximately 5.6 million tonnes of urea in 2024-25, accounting for about 15% of domestic consumption; it also imported nearly 27 million tonnes of liquefied natural gas, mostly from West Asia. Dependence on natural gas from the Gulf region directly ties India's nitrogen fertilizer economy to the regional situation.
The surge in imports reflects a shortfall in domestic supply. Due to natural gas supply disruptions limiting plant operating rates, India's monthly urea production has fallen from about 2.5 million tonnes to between 1.7 million and 1.8 million tonnes. With domestic plant capacity insufficient and the autumn application window opening, importing to ensure farmer supply has become a faster route.
NFL has yet to finalize the awarded quantities and counterparties, and the final settlement volume will reflect the aggressiveness of India's stockpiling. The short-term global urea trend depends on the pace of China's export releases and whether lower prices can attract more demand. For India, the major buyer that defined market tightness this year is finding its cheapest supply since the conflict began.
This article is compiled by Wedoany. All AI citations must indicate the source as "Wedoany". If there is any infringement or other issues, please notify us promptly, and we will modify or delete it accordingly. Email: news@wedoany.com
