US Gulf:
NOLA urea prices early in the week were reported in the $640-$650/st range, but product traded as high as $687/st FOB by the end of the week. The week-ago range was $630-$680/st FOB. While the average for the week saw a slight uptick, sources said the news of higher prices in the Indian tender were already baked into NOLA thinking.
US Imports:
July urea imports softened 62.3%, to 176,578 st from 468,526 st in July 2021. Imports loading from Qatar totaled 108,433 st for the month, ahead of Canada’s 36,553 st total. Russia added 28,709 st.
US Exports:
July urea exports were noted at 301,655 st, a 3,154.7% increase from the year-ago 9,268 st.
Eastern Cornbelt:
Urea prices in the Eastern Cornbelt were unchanged at $715-$745/st FOB at mid-month, depending on location. Michigan sources quoted new offers FOB Toledo, Ohio, at $705-$735/st FOB, depending on time of shipment.
Western Cornbelt:
Urea prices were pegged $690-$730/st FOB in the Western Cornbelt, depending on location and timing, with St. Louis, Mo., pricing reported in a broad range $690-$725/st FOB at midweek, up from the prior week’s high of $705/st FOB. The Catoosa/Inola, Okla., urea market was reported at $710-$730/st FOB during the week.
Northern Plains:
Urea prices continued to inch up in the Northern Plains, with new offers quoted at $720/st FOB Carrington, N.D., and $750-$780/st DEL, up from $745-$770/st DEL at last report. The St. Paul, Minn., urea market was pegged at $710-$730/st FOB at midweek.
Northeast:
The latest urea prices in the Northeast were reported at $730/st FOB Fairless Hills, Pa. In the Southern US, new pricing FOB Convent, La., was pegged at $685/st FOB at midweek, up from the previous $670/st level.
India:
RCF released the prices offered in its Sept. 9 urea tender. The lowest prices for East Coast and West Coast deliveries came from OQ Trading at $675.25/mt CFR and $668.15/mt CFR, respectively. The price was $148-$158/mt higher than the previous tender.
| Company | Quantity Offered | Price (US$/mt CFR) | Delivery Port |
| OQ Trading | 90,000 | 675.25 L1 | Kakinada-Karaikal |
| 135,000 | 668.15 L1 | Kandla | |
| Sun International | 54,000 | 679.00 | Vizag-Kakinada |
| Aries | 95,000 | 695.17 | Krishnapatnam-Vizag-Kakinada-Paradip |
| Swiss Singapore | 90,000 | 696.10 | East Coast Port |
| 200,000 | 687.00 | West Coast Port | |
| Samsung | 45,000 | 699.00 | East Coast Port |
| 180,000 | 719.70 | West Coast Port | |
| Fertiglobe | 90,000 | 699.00 | Kandla-Mundra |
| Gavilon | 45,000 | 703.00 | East Coast Port |
| 45,000 | 703.00 | West Coast Port | |
| Fertcom | 45,000 | 710.00 | Paradip |
| 45,000 | 690.00 | Pipavav | |
| Ameropa | 183,500 | 711.00 | Mundra-Pipavav |
| 183,500 | 711.00 | Kakinada-Paradip-Krishnapatnam | |
| Koch | 45,000 | 730.00 | Krishnapatnam-Kakinada |
| 45,000 | 730.00 | Mundra-Kandla | |
| Midgulf | 100,000 | 739.00 | Gangavaram-Krishnapatnam |
| 100,000 | 735.00 | Mundra-Adani Tuna | |
| Sabic | 100,000 | 750.00 | Mundra-Kandla |
| Wilson | 50,000 | 760.00 | Kakinada |
| Keytrade | 38,000 | 770.00 | Kakinada |
| 42,000 | 720.00 | Kandla | |
| Dreymoor | 60,000 | 770.00 | Pipavav |
| AgriCommodities | 50,000 | 850.00 | Krishnapatnam |
| FOB | |||
| Company | Quantity Offered | Price (US$/mt FOB) | |
| Fertiglobe | 90,000 | 680.00 |
The price was lower than many had expected, but not so low that RCF was limited to the OQ tons. Still, the buyer was looking to buy 1 million mt of urea in this tender, but was only able to get commitments for 874,000-879,000 mt.
The counterbid from RCF was issued as soon as the initial offers were made public. Acceptances and regrets came almost as fast from the offering trading houses.
| Company | Quantity Awarded | Delivery Port | Source |
| Midgulf | 45,000 (50,000) | Gangavaram-Krishnapatnam | China |
| Swiss Singapore | 45,000 | ECI | Southeast Asia-Baltic |
| 90,000 | WCI | ||
| Fertcom | 45,000 | Paradip | Baltic |
| Aries | 95,000 | Krishnapatnam-Vizag-Kakinada-Paradip | Southeast Asia-China |
| Sabic | 50,000 | Mundra-Kandla | Saudi Arabia |
| OQ Trading | 90,000 | Kakinada-Karaikal | Middle East-China |
| 135,000 | Kandla | ||
| Fertiglobe | 45,000 | Kandla-Mundra | UAE |
| Sun International | 54,000 | Vizag-Kakinada | China |
| Samsung | 45,000 | Kakinada | Southeast Asia-UAE-Baltic |
| 135,000 | WCI |
Sources now expect the Department of Fertilizer to move quickly to authorize purchasing the 874,000-879,000 mt.
The failure to get 1 million mt, said one trader, will mean India is behind in its urea purchase for the rest of the year. Even with the respectable take in this tender, there is a danger that Indian buyers could repeat the series of panic buying that took place two years ago.
For now, sources expect the Department of Fertilizer to hold off authorizing another tender for at least a month.
Sources said the next tender will be more expensive than this one. The country still needs a bit more than 3 million mt to close out its application year. As long as China maintains its export restrictions, major buyers such as India will have to look to the Arab Gulf and Russia for large shipments.
Buying from Russia could soon be easier. Bloomberg reported that the State Bank of India is opening special rupee accounts to handle Russian-related trade. There has long been talk of setting up a larger version of the rupee-ruble exchange program that the two countries have had for some time.
The establishment of the special accounts will help shield traders from any repercussions from Western sanctions. Even though the US has said it would not begin sanction proceedings against any bank or insurance company backing the purchase or shipment of Russian fertilizer, some European sanctions are not as generous.
At the same time, many in the international financial community remain wary about initiating a deal, only to find that the rules might change at the last minute.
Middle East:
The netback from the RCF/India tender is estimated at $645-$650/mt FOB. The price is well below the hoped-for $680/mt FOB that Fertiglobe offered in the tender. It is also a large drop from the last spot deal, but not wholly unexpected.
Sources said urea booked under the RCF tender and under existing long-term contracts with other buyers around the globe could mean full order books through October.
Iranian exports for January-August 2022 were reported at 3.1 million mt by Trade Data Monitor, up 24% from the 2.5 million mt exported during the same period in 2021. The main buyers were Turkey at 964,000 mt, South Africa at 430,000 mt, and Mozambique at 228,000 mt.
August 2022 exports were reported at 631,000 mt, up 25% from the 507,000 mt exported during August 2021. South Africa accounted for 23% of the sales with 143,000 mt. Turkey took 104,000 mt for 22% of exports. Mozambique bought 102,000 mt in August for another 16% of the sales, and Thailand bought 10% of the exports at 65,000 mt.
Egyptian producers remained quiet as the world focused on the Indian tender. There are reports that a plant or two will be taking routine turnarounds.
Indonesia:
A sale of 35,000 mt of granular urea for October shipment was concluded at $675/mt FOB. The deal moved up prices on the heels of the RCF/India tender. Sources said Swiss Singapore will be using a previously purchased cargo as part of its shipments to India.
China:
The netback to China from the RCF/India tender is calculated at $650/mt FOB. The price fits in with the Arab Gulf prices. For the past few years, prices out of China and the Gulf have been running at parity. Sources estimated just a bit less than 200,000 mt will go to India from China.
South Korea:
January-August 2022 imports of urea were reported at 714,000 mt by Trade Data Monitor, up 15% from the 619,000 mt purchased during the same period in 2021.
While China was still the main supplier of urea to South Korea for the first eight months of the year at 206,000 mt, its shipments were down 55% from the 463,000 mt sold during the same period in 2021.
Other suppliers were big winners with China’s absence. Qatar, with 157,000 mt, was up from 29,000 mt the previous year. Indonesia sent marginally more, at 74,000 mt from the 61,000 mt in 2021. Vietnam sales jumped to 59,000 mt from the January-August 2021 sales of 6,000 mt.
August 2022 imports were up dramatically to 104,000 mt. This is a 61% increase from the August 2021 imports of 43,000 mt.
Ethiopia:
Reports are circulating that Ethiopia will soon be calling another urea tender, but with no word on how many tons it will be looking for.
January-August 2022 urea imports were reported at 456,000 mt by Trade Data Monitor, a marginal increase from the 431,000 mt imported during the same period in 2021. Egypt dominated the supply, sending 355,000 m, followed by the UAE with 100,000 mt.
August 2022 imports were reported at 50,000 mt, and all from Egypt. No tons were imported during August 2021.
Black Sea:
Russian material is expected to be part of the tons heading to India. Sources noted that this tonnage would most likely be coming out of Baltic ports instead of the Black Sea.
Traders said most of the urea coming out of the Black Sea is product from non-Russian countries connected to the Sea. Most of the product is being shipped out of Poti in Georgia on the far eastern edge of the Black Sea.
So far, said sources, the prices and quantity of Russian material that have come out of the Black Sea have been jealously guarded.
Brazil:
The reaction to the Indian tender price was a drop in prices in Brazil. Sources are now calling the market $700-$750/mt CFR. The move comes as more pressure builds to go to sub-$700/mt CFR, but no one has been able to confirm any deals at that lower level.
Rondonopolis is also softer at $830-$910/mt FOB ex-warehouse. Markets softened first as buyers held off making a commitment until the Indian tender numbers were released. As soon as the numbers were released, the market looked at the price as a steadying force instead of an indicator of a major shift.
Some also noted that the inability of RCF to secure the full 1 million mt it had requested could mean that some traders might have cargoes for sale to other markets, such as Brazil.