US Gulf:

The NOLA urea market tightened from last week’s broad $370-$420/st FOB range. New business was confirmed at $380-$405/st FOB for limited transactions as the global industry waits to digest the latest India tender, with the low end of the NOLA range quoted for full October and the high for a loaded barge sale earlier in the week.

Eastern Cornbelt:

Urea was unchanged at $450-$470/st FOB in the Eastern Cornbelt, depending on location, with the Cincinnati, Ohio, market quoted in the $455-$460/st FOB range.

Western Cornbelt:

Urea pricing remained at $450-$470/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and the high in Iowa. The Port Neal, Iowa, market was pegged in the $450-$465/st FOB range in early October.

Northern Plains:

The urea market was quoted at $475-$500/st FOB regional terminals in the Northern Plains, with delivered tons pegged in the $520-$545/st range.

Northeast:

Urea prices firmed to $460-$470/st FOB in the Northeast, with the low reported at Fairless Hills, Pa., and the high at Baltimore, Md.

Eastern Canada:

Urea prices in Eastern Canada slipped to C$695-$725/mt FOB in early October, down from the previous C$705-$770/mt FOB range.

India: 

Indian Potash Ltd. (IPL) called a urea tender to close on Oct. 20, with a shipping deadline of Dec. 10. The tender was expected to come sooner, with speculation about the delay dominating discussions through the early week.

Some said bureaucratic barriers, including a need to track down a busy government minister to sign an approval document, created the delay. Others said IPL could have slowed the announcement to counter the market’s building anticipation for the tender, in an effort to force prices down from the $400-$405/mt FOB achieved in the Rashtriya Chemicals and Fertilizer Ltd. (RCF) tender in September.

Whatever the reason for the delay, sources expect the market to continue to show stronger prices. Traders initially speculated that prices would land in the mid- to upper-$420s/mt CFR. By the end of the week, with the tender call made, expectations lifted into the $430s/mt CFR, with some even suggesting that $440/mt CFR was possible.

Pricing in the $420s/mt CFR would fall in line with the bulk of the offers in the RCF tender. The price that was ultimately awarded came from an outlier offer at $400-$405/mt CFR. The subsequent upward push in global prices, said one trader, would argue for a tender price in the $430s/mt CFR.

Traders added that China seems to be firm in its policy of not allowing large cargoes for export, leaving it out of consideration as a source for the new tender. At the same time, Russian product from the Baltic is limited and costly to send to India. This leaves Arab Gulf producers as the most likely main suppliers.

Producers were discussing possible prices in the $410s/mt FOB when a $420/mt FOB deal was reported out of the Arab Gulf, about $40/mt higher than the netback from the RCF tender. A $420/mt FOB transaction would translate to a landed price of $435-$438/mt CFR in India.

Sources all said pricing expectations in the $420-$430s/mt CFR could be dashed again if one offering company comes in with a price below the other offers, as demonstrated in the RCF tender. While the Indian buyer might prefer a lower price, one trader noted, the real issue will be securing tons at that level.

RCF had hoped to buy 1.2-1.5 million mt in its September tender. Once the price was set below expectations, however, the company could only secure 525,000 mt at that price. If an outlier offer is presented in this tender, sources predicted the final take could be even less.

IPL needs to buy at least 1.5 million mt in this tender to avoid a severe shortage of urea in the country, sources noted. Purchasing by farmers in India has exceeded expectations, according to earlier government reports. Even with domestic production running higher than usual, the gap between demand and supply is seen around 2.5 million mt through the end of the year.

If another tender must be called after this one – and many expect one will be needed – the shipping period will go into January and possibly early February. These months are marked by difficult weather conditions that can delay the unloading of product for weeks.

Black Sea:     

Prices for prilled urea in the Black Sea narrowed to a flat $360/mt FOB.

Indonesia:     

PT Pupuk Indonesia Holding Co. settled its Sept. 29 tender with Ameropa, selling 40,000 mt of granular urea at $406/mt FOB and 5,000 mt of prilled urea at $397/mt FOB. Both lots are slated for October shipment. The granular deal reflected a drop of $9/mt from the Sept. 19 tender price of $415/mt FOB.

No more tenders are expected until at least December, sources said, and there are reports that the Sept. 29 tender may be the last for the year. Some traders were unsure if any allotments are left in the export permits for 2023.

A lack of additional new tenders may also be a result of the continued investigation by the Indonesian Justice Ministry into Pupuk and the Agricultural Ministry. Many of the individuals responsible for calling and running the selling tenders, while not under investigation, have reportedly found that no actions are possible while their higher-ups respond to the investigators.

Thailand:

Trade Data Monitor put January-August imports at 1.8 million mt, up 26% from 1.5 million mt in the prior-year period. As is typical, Saudi Arabia dominated imports with 785,000 mt, for 40% of the market. Thai buyers have long received favorable contract prices from the Saudis as a way for the producer to maintain a strong and steady market. August imports of 405,000 mt were up 91% from 212,000 mt received in August 2022.

Middle East: 

The week opened with talks centered around $410/mt FOB, according to reports, but with no takers. Sources then confirmed reports that Oman sold at least one cargo at $420/mt FOB, pushing the Arab Gulf price up about $40/mt from levels achieved in the September RCF/India tender. The Oman deal has inspired other producers to hold out for a better price.

On the heels of last week’s business that took prices to $425/mt FOB in Egypt, sources reported a new deal for about 7,000 mt of granular urea at $440/mt FOB. In addition, Helwan and KIMA were reported to secure awards of 50,000 mt each into the Ethiopian Agricultural Businesses Corp. (EABC) tender, while reports signaled that one more cargo might be sent to Ethiopia under an award issued to a trading house.

The small price-boosting sales, along with the larger deals into Ethiopia, have left producers comfortable with their situations. Producers currently see no reason to haggle over prices, sources said.

China:

The market was mostly silent in China as the country enjoys a week off to celebrate the mid-Autumn Festival and the founding of the PRC. The Golden Week holiday left many offices empty and calls from traders unanswered, holding prices at $385-$390/mt FOB.

From the limited discussions that did take place, sources learned that China’s government appears to be serious about its plan to restrict exports. Any discussion about exporting urea must reportedly be limited to lots of 6,000-12,000 mt. No large cargoes, such as those needed to back an offer into the Indian tender, will receive permission to be exported.

The government hopes to keep the bulk of its domestically produced urea in the country in order to build strong reserves during the winter months.

Ethiopia:       

The Sept. 14 EABC tender called for four lots of 50,000 mt each to be delivered in September and October. The September deadline has passed, but October is looking better. Two Egyptian producers have been booked to supply 50,000 mt each in October, players said. There were also reports that some of the tender’s participants remain in talks to nail down the other 100,000 mt.

Ethiopian urea imports depend on the success of its tenders. Trade Data Monitor showed imports of 556,000 mt for January-September, rising 22% from the year-ago 456,000 mt.

Ethiopia imported zero urea in September, compared with just 403 mt purchased in September 2022. Third-quarter imports were pegged at 306,000 mt, significantly above the 111,000 mt received one year earlier.

Turkey:         

January-August urea imports firmed 62% year-over-year, according to Trade Data Monitor, to 2.4 million mt from 1.5 million mt received through the same period last year. August imports were counted at 176,000 mt, down slightly from 186,000 mt logged in August 2022. Oman supplied 115,000 mt, followed by Egypt and Russia with 18,000 mt each.

Argentina:    

Imports of urea totaled 454,000 mt in January-August, Trade Data Monitor reported,a 16% decline from the year-ago 540,000 mt. Economic and political upheaval, as well as a drought, have limited demand for all fertilizers, sources said.

Brazil:

Brazil urea import prices lifted to $420-$425/mt, up from the week-ago $390-$410/mt CFR. Traded volumes were thin as players awaited the new Indian tender announcement. With the tender now out, sources are expecting a quiet period before prices resume their upward trend.

The Rondonopolis market followed a similar trajectory to imports, with some sellers increasing prices while others waited for the new Indian tender. Prices jumped to $530-$560/mt FOB ex-warehouse, up from last week’s $525-$545/mt FOB, with players noting slow negotiations and limited business.