US Gulf:

NOLA urea took another drop on Nov. 20-21, falling to a low of $292/st FOB for November, with reports of confirmed trades at $298-$302/st FOB for January and $300-$305/st FOB for December tons.

The new business followed transactions on Nov. 17 at $300-$305/st FOB for December and $308-$310/st FOB for January, and was well below last week’s reported range of $323-$335/st FOB for November-December.

Eastern Cornbelt:

A sharp drop in NOLA barge prices pushed urea terminal levels lower in the Eastern Cornbelt. While the upper level of the regional market remained at a high of $420/st FOB on a spot basis, river terminals fell to $360-$380/st FOB during the week, with the low reported at Cincinnati, Ohio. This was down significantly from last week’s $405-$435/st FOB range in the region.

Western Cornbelt:

Urea slumped to $380-$385/st FOB St. Louis, Mo., down another $15/st from the prior week, with the upper end of the regional range pegged at the $420/st FOB level on a spot basis.

Southern Plains:

Urea slipped to $385-$395/st FOB regional terminals in the Southern Plains, down from last week’s $410-$430/st FOB range, with the low confirmed at Catoosa/Inola, Okla.

South Central:

Urea dropped to $380-$385/st FOB at the low end of the range in the South Central region, with the high remaining at $430-$450/st FOB. The lower numbers were reported at Convent, La., and out of spot river terminals in Kentucky, with the high at Memphis, Tenn., and out of Arkansas terminals.

Southeast:

Urea prices fell to $420-$425/st FOB port terminals in the Southeast, down from $440-$445/st FOB earlier in November.

India: 

Nearly all of the 1.7 million mt booked in the October Indian Potash Ltd. (IPL) tender has now been nominated to vessels. Market watchers have so far identified the sources of about 1.6 million mt of the urea.

To the surprise of many in the industry, China will send about 424,000 mt to India. While sources initially predicted that 600,000 mt could be offered from China, the country’s subsequent recommendation to limit urea exports led sources to revise their estimates, saying that IPL would be lucky to get 200,000 mt.

About 460,000 mt is expected to be sourced from the Arab Gulf, with most of the material coming from Oman. Russia was estimated to back 397,000 mt, and Southeast Asia is expected to send 252,000 mt – mostly from Indonesia. North Africa will ship 81,000 mt, divided between Egypt and Algeria, though at least one more cargo is expected from Egypt, sources said.

The Indian government will begin analyzing both the country’s urea reserves and demand from farmers after the tender’s Dec. 10 shipping deadline, and the results will be scrutinized before another tender is called. Sources remain convinced that a new tender will be called between late December and mid-January 2024.

Urea imports moved down 38% in January-September, according to Trade Data Monitor, to 4.3 million mtfromthe 6.8 million mt received through the first three quarters of 2022. Third-quarter imports were 1.4 million mt, down from 2.2 million mt in last year’s quarter. September imports were flat from the year-ago at 567,000 mt.

Pakistan:       

The government of Pakistan has shifted its focus away from a public tender and instead will look to purchase 200,000 mt of urea in December in a government-to-government deal. The government said it is talking with China, Russia, and Azerbaijan to obtain the tonnage it needs for the rest of the Rabi season.

Left out of the discussions was Saudi Arabia, sources noted, Pakistan’s usual partner for government-to-government deals involving urea and DAP. One source speculated that the Saudis had their hands full with regular contracts and fulfilling orders from the IPL tender.

Stepping away from a public tender was necessary to ease pressure on Pakistan’s foreign reserves, said sources. The target price for the imported urea was put at $415-$420/mt CFR, in line with the price paid by IPL in India’s latest tender. Pakistan also hopes to obtain favorable credit rates under the government-to-government plan.

The urea imports were needed after it became apparent that natural gas supplies would be insufficient for domestic urea producers. The government previously laid out plans to divert a large amount of natural gas for residential use, forcing urea producers to reduce output.

Indonesia:     

Pupuk Holding closed a tender during the week, offering 20,000-30,000 mt of granular urea for shipment in late November or early December.

No reserve price was believed to have been set for the offered tonnage, sources said. In the end, the highest bid appeared to come from Samsung at $340/mt FOB, down about $40/mt from Indonesia’s last granular sale.

Bidding Company	$/mt FOB
Samsung	340.00
Ameropa	335.00
Liven	333.00
Oracle	332.00
Camelot	329.00
Finstar	290.00
Koch	280.00

Sources tied the price drop to the market’s current low demand and softening international prices. The only major buyer at this time is India, who will not be buying anything until late December at the earliest, said sources. This leaves sellers with building reserves and no place to send their product.

January-September exports fell 43% year-over-year, Trade Data Monitor reported, to 838,000 mt from 1.5 million mt. Third-quarter exports of 197,000 mt were down from 639,000 mt in July-September 2022.

September exports were reported at 137,000 mt, down from the 196,000 mt shipped in September 2022. The Philippines and Chile each took about one-third of the month’s exports, followed by Australia with 31,000 mt.

Middle East: 

Sources reported that roughly 460,000 mt will be shipped to India from the Middle East under the IPL tender. This tonnage comes in addition to the contracted material producers move out on a regular basis, a combination that will leave producers comfortable well into December.

Potential buyers are now discussing prices in the low-$350s/mt FOB. Because producers are under no pressure to sell, however, no deals were reported at that level. To keep up the pressure, some traders noted that January bidding could fall as low as $320/mt FOB, with only a slight rebound in February.

As pressure builds for lower prices, Egyptian producers are now said to be entertaining bids at $365-$370/mt FOB. There were no reports of confirmed deals at that level, however, leaving the last-done price of $390-$410/mt FOB in place.

Producers pointed to the $387-$397/mt FOB price for Egyptian material in the Ethiopian Agricultural Business Corp. (EABC) tender as an argument for rejecting the lower bids coming from smaller buyers for the European market. However, one source noted that the Ethiopians have traditionally paid a premium for their urea compared to European buyers.

If EABC awards the offers backed by Egyptian urea, some producers will feel less pressure to accept lower bids from traders looking to sell to Europe. The shipments to Ethiopia are spread out between December and May, however, leaving lots of opportunities for buyers.

Iranian producers are now reportedly looking at $330/mt FOB, down from the $350/mt FOB under discussion just one week ago. A tender offering 30,000 mt of granular urea will close on Nov. 22 and should provide a better view of where the market for sanctioned material has moved. Buyers for Brazil and Turkey are expected to offer aggressive prices in the tender.

Trade Data Monitor noted January-October urea exports at 4.1 million mt, off slightly from the year-ago 4.2 million mt. October exports were 438,000 mt, down from 471,000 mt in October 2022.

China:

China will supply an estimated 424,000 mt of urea into the IPL/India tender, more than was expected following the clampdown on exports imposed earlier this month.

A circulating rumor raised concerns that some of the tonnage already earmarked for India might not be allowed to ship. According to the rumor, all exports – regardless of export authority status – were to stop immediately.

Traders said they have seen nothing in writing and have not heard from Chinese government officials themselves. However, the rumor spread quickly among Chinese traders and port authorities, sources reported. So far, no tonnage that was previously approved for export has been blocked from loading, and sources reported export talks underway for 3,000-10,000 mt lots.

The restrictions on urea exports were designed to build up domestic reserves and drive down domestic prices, and some impact has already been reported from the action. Based on the ex-plant price, the export-equivalent price for prilled urea is now reported in the upper-$350s/mt FOB.

Urea exports were 3.4 million mt in January-October, according to Trade Data Monitor, a 76% increase from 1.9 million mt in the prior year. China exported 562,000 mt in October, up 60% from the 351,000 mt shipped one year earlier.

South Korea:

Urea imports fell 23% in January-October, Trade Data Monitor reported, to 594,000 mt from the year-ago 776,000 mt. October imports were 80,000 mt, a rise from 22,000 mt in October 2022. China supplied 69% of the month’s imports, sending 56,000 mt.

Brazil:

Urea prices fell 10.7% in Brazil, to $300-$330/mt CFR from last week’s $345-$360/mt CFR range. Prices have softened nearly 20% since the start of the month, and there are reports of large unsold volumes and dry weather impacting demand. Some market players are hopeful that safrinha demand will increase in the next two weeks.

Following consecutive weeks of falling CFR prices, more aggressive offers have begun to appear at Rondonópolis. Prices were noted at $480-$505/mt FOB ex-warehouse, down $25-$30/mt from last week. Despite the drop, the lack of rain in the state’s southern region continues to delay demand for the winter corn season.