An addendum to the MMTC urea tender that closes July 30 could impact how many tons are offered from China. The first part of the addendum codifies a recently enacted requirement that any company from a country that shares a land border with India must be registered with the Indian government. Sources said this was clearly aimed at Chinese companies operating in India.
The second part of the addendum is less clear. It says the rule also applies to any sub-contractor in the supply chain the trader may use. Sources were not sure it this includes ensuring the urea producer is registered with the Indian government or if non-Chinese companies can use their China-based offices to secure tonnage for the tender. At a minimum it eliminates international traders using intermediaries. One trader said it will also help stop the re-export of Iranian urea to India because of the various steps necessary to clean up the paperwork to make the urea look as it is of Chinese origin.
Sources said the new rule will increase the risk of offering Chinese product in the tender, thereby reducing the amount of tonnage offered.