U.S. Gulf: Prompt granular barge trades continued to move up over the holidays, firming to $335-$341/st versus the Dec. 22 $322-$333/st FOB. Many players were taking time off for a long stretch, however, so actual trading may have been limited.
Prill barges were called $315-$327/st FOB.
Eastern Cornbelt: Granular urea remained at $360-$385/st FOB in the Eastern Cornbelt, with the low out of river locations and the upper end inland.
Western Cornbelt: Granular urea was steady at $360-$370/st FOB in the Western Cornbelt, with some talking of a likely increase in early 2015.
California: The granular urea market remained at $410-$415/st FOB in California, with no current delivered prices reported in late December.
Pacific Northwest: Granular urea was up slightly at $390-$400/st FOB coastal terminals in the Pacific Northwest, with delivered tons pegged nominally in the $410-$420/st range in the region.
Western Canada: The granular urea market was quoted at $565-$590/mt DEL in Western Canada, up $30/mt from early December pricing levels.
India: Sources report that just about everyone who had an award in the IPL tender has a vessel booked. The vessel lineup fits in nicely with the Jan. 12 ship-by deadline.
Reportedly many of the traders worked out their contracts so that the price of material loaded after Jan. 1 in China would reflect the new export duty regulation instead of the old one. One trader noted that this provision will help a few trading houses earn a little more on their sales.
Industry watchers say it is too soon to tell if there will be another tender before the end of the fiscal year in March. Localized complaints of urea shortages are offset by competing reports of sufficient supplies in key agricultural areas. One observer noted that some of the complaints were aimed more at the amount of urea in reserve rather than what the farmers actually need now.
Sources say any purchases after January will most likely be for reserves to jumpstart the next season. With that in mind, said one trader, it would make more sense for India to wait and see how the global market moves before committing to another major purchase.
New production around the world, say sources, along with easier access to Chinese product, could keep urea prices soft for a while.
The Indian government is stepping up its efforts to produce more urea at home. Under the New Investment Policy (NIP) announced in October, the Indian government asked for proposals from urea producers for ways to increase production. The government said it received more than a dozen plans from producers, but media reports say only four or five of those proposals will be accepted this year. Of the 12 or so proposals, only two were for new production facilities. The rest were requests for support to expand existing plants.
The NIP was designed to make India self-sufficient in urea without being an added burden on the national treasury. Companies wanting government support – including tax breaks and subsidies – had to first put up Rs3 billion (US$47 million) as a sign they were able to follow through with their plans.
The government plan to increase local production means it could reduce the amount it pays in urea subsidies, because locally produced urea is cheaper than the imported variety. A government panel comprised of the fertilizer, finance, petroleum, and agriculture ministries will start reviewing the proposals this month.
Government sources tell local media they want to have the first set of projects started before the fiscal year ends in March. At the same time the government is moving to increase local production, it is also reviewing th