A total of 3.6 million mt of urea was offered in the IPL tender that closed July 14. The average price of the offers was $423.76/mt CFR, more than $100 off the price paid by STC in May.
Industry watchers expected to see a lot of large offers from a wide variety of traders and producers. The only other large buyer in the market was TCP from Pakistan and it is down to just asking for 50,000 mt in a new tender.
Indian buying has been behind schedule largely because the rains from the seasonal monsoon are late. The Indian government estimates that the main growing areas of the country have received only 65-70 percent of the rain needed instead of the usual 95 percent at this time. Delays in the rain mean delays in planting and fertilizer applications.
Traders have noted that Indian reserves of urea are very low. Local distributers have been filling farmers’ orders with stock on hand. Sources say few tons are in the pipeline to replenish the sales.
The last import deal was in May when STC paid $535-$540/mt CFR for about 500,000 mt. Prior to that deal, IPL awarded Emmsons a contract for 500,000 mt at $385.83/mt CFR for Iranian tons. Unfortunately for the Indian farmers and Emmsons, the trading house could not secure the material at a price that would work. It declared force majeure on the deal.
Sources report that Emmsons recently chartered two vessels to take material from Iran to India. Industry watchers speculate that Emmsons was successful in its efforts to revitalize its award from March at current rates.
The next step in the procedure is for IPL to counter bid with prices based on ports of discharge.