U.S. Gulf:
Some have seen no rhyme or reason for this year’s volatile NOLA urea market, though most of this week’s movement was attributed to India’s tender for urea. Prices ran up as high as $650/st FOB before declining.
Urea trades over the past week for February were reported in the $575-$650/st FOB range, compared to the week-ago $485-$590/st FOB. March trades were put at $575-$670/st FOB and April at $570-$575/st FOB.
Eastern Cornbelt:
Urea prices saw an uptick in the Eastern Cornbelt during the week, fueled by a NOLA barge market that initially strengthened before once again falling as the week advanced. Sources quoted the regional market at $680-$710/st FOB, up from the previous week’s $630-$650/st FOB, with the low confirmed in the Illinois market.
Urea pricing at Cincinnati, Ohio, reportedly moved up to $705-$710/st FOB as the week progressed, up from an earlier low of $685-$700/st FOB. Indiana sources reported the river terminal market at the $700/st FOB level at midweek.
Western Cornbelt:
Urea prices reportedly firmed to $655-$695/st FOB in the Western Cornbelt, up from the prior week’s $620-$655/st FOB range, depending on location. The St. Paul, Minn., market was pegged in the $650-$660/st FOB range for river-open tons.
Southern Plains:
Urea pricing reportedly firmed to $685-$705/st FOB Catoosa/Inola, Okla., as the week progressed, depending on supplier, up from $620-$655/st FOB during the previous week. No current pricing levels were reported at Houston, Texas, due to market volatility, sources said.
South Central:
Sources said urea prices in the South Central region were rebounding as the week progressed, fueled by continued NOLA pricing volatility and a jump in prices following a recent India tender call.
The low end of the regional market was pegged at $650-$655/st FOB Memphis, Tenn., while pricing at Convent, La., had reportedly jumped to $660/st FOB from the prior week’s low of $610-$620/st FOB. Urea terminals in Arkansas generally fell in the $690-$695/st FOB range at midweek.
Southeast:
Sources reported volatile urea pricing in the Southeast during the week, with some terminals seeing prices rebound from the prior week’s lows.
The market FOB Wilmington, N.C., was pegged at a firm $690/st FOB at midweek, up from $680/st FOB late the previous week. Pricing at Savannah, Ga., had reportedly jumped to $700/st FOB from a low of $640/st FOB in late January.
India:
Last week closed with IPL calling a tender, which will close on Feb. 7 with a shipping deadline of March 20.
Sources noted that Indian companies rarely call a tender for delivery to be completed just as the fiscal year ends. In several past tenders, the call was made in March, but delivery and payment occurred after April 1 when the new fiscal year starts.
Sources estimated India is still about 1.2 million mt short of its basic urea needs for this season. The deficit is in part due to limited awards in the 2021 tenders because of rising prices and limited availability.
The bulk of the shortage, however, was because India could no longer depend on 2 million mt coming from OMIFCO at favorable rates. The inability to negotiate a new supply contract left the country short of tons that it once received on a regular basis, along with the 6-8 million mt it needed to buy under the tender process.
There is a consensus that prices in the new tender will be lower than the $894-$899/mt CFR paid in the last tender. How much lower is up for discussion. Sources said the most recent Egyptian price of $735/mt FOB could translate to a West Coast India price of around $770/mt CFR. At the same time, however, the high bid in the scrapped Indonesian tender of $666/mt FOB would translate to a price just under $700/mt CFR to India.
Reportedly, traders are taking steps to ensure they have the tons under contract before they make an offer. In the past, some producers would work with a variety of traders, figuring at least one would get an award. This time, because there are limited resources for export urea, no one is taking a chance.
Even with the China export ban in place, some sources said a couple of cargoes from China might be included in the mix. Reportedly, some traders and producers are making arguments to customs officials that some areas in China have enough urea on hand to cover their needs, so some of the excess material can be exported. Sources said at least two cargoes might be available under this type of action.
The Indian government released its proposed 2022/23 budget this week. After rumors that the amount for subsidies would be increased by about 19 percent, the revealed numbers actually showed a drop. The amount for urea subsidies was set at US$8.5 billion, down 17 percent from the 2021/22 budget even after revisions to the existing budget that increased the funds for subsidies.
Fertilizer industry and farmers’ groups criticized the proposed budget. For its part, the government said it has had a long policy of looking to move away from subsidies and will seek other ways to help farmers.
Indonesia:
Two quick-selling tenders closed on Feb. 3. Kaltim looked to sell 45,000 mt of granular urea for March shipping, while Pusri offered 5,000-10,000 mt of prilled urea for shipment in late February. Neither company offered a reserve price.
In the end, both tenders were scrapped. Sources reported the highest bid in the Kaltim tender was $666/mt FOB, and the highest bid for the prilled urea was $708/mt FOB. If the two companies follow past practices, they will now go into a series of private talks with the trading houses to come up with a new set of prices for the material. At the same time, the producers may sweeten the deals by offering more tons for export.
The $666/mt FOB bid in the Kaltim tender was up against calculations on the equivalent price of the Egyptian urea sold over the past week. The last deal from Egypt settled at $735/mt FOB for an equivalent price into India of $770/mt CFR. Working back to Indonesia, that cargo would be about $740/mt FOB.
Exports of urea for 2021 were reported at 2 million mt, about 15 percent down from 2020 exports of 2.4 million mt, according to Trade Data Monitor.No one buyer dominated the Indonesian sales books.
| Country | Quantity (mt) | % Of Indonesia Exports |
| Philippines | 299,000 | 14.7 |
| Australia | 290,000 | 14.3 |
| India | 245,000 | 12.0 |
| Vietnam | 205,000 | 10.0 |
December 2021 exports were down dramatically, to 54,000 mt from December 2020 exports of 216,000 mt. Normally the December-February export numbers are low because the producers focus on the domestic market. Also, usually by December the producers will have used up their export permits for the year.
Exports to Australia are expected to show a marked increase in the first quarter of this year. A deal was struck to send more urea to Australia to cover needs for its emissions control program. In the past, Australia bought the urea it needed from China. With the Chinese holding back on urea exports and engaged in a political squabble with Australia, however, the buyers went for a much closer source of urea.
China:
Sources said talks are taking place that might shake a couple of cargoes loose for March shipment. Reportedly, traders and producers are talking with customs officials to demonstrate that some areas of China have sufficient urea supplies to manage local needs. Any excess material, they argue, should be allowed to be exported.
At the same time, traders are also talking with producers to line up material for shipment once the export ban is lifted at the end of April. One trader noted that if rumors are correct, Chinese ports will have a large line up of vessels waiting to pick up urea through May.
Middle East:
Sales out of Egypt started moving up late last week and continued into this week. By Wednesday, sources reported a sale of 5,000 mt at $735/mt FOB. This deal comes on the heels of larger quantities working the price up from $715/mt FOB with each new deal.
To add fire to the Egyptian market, sources reported that EABC in Ethiopia awarded Fertiglobe 450,000 mt from its most recent tender. The reported netback to Egypt was put at $755/mt FOB for shipments in the first quarter, and $710/mt FOB for shipments in April and May.
The paper market for Egyptian material was reported at $745/mt FOB for February and $735/mt FOB for March.
Producers in the Arab Gulf reportedly were talking about prices just under $700/mt FOB late last week until the India tender was announced. Sources said the producers have now gone quiet with their public expectations for pricing. They are, however, in talks with any and all who want to participate in the Indian tender.
Reportedly, there is enough excess material available for March loadings to make IPL happy. The only question now boils down to the price. The bids into the Indonesian tenders and the sales out of Egypt could lead producers to hold out for prices in the mid-$700s/mt FOB. The paper market agrees with this level, with quotes at $745/mt FOB for February. The March paper market is pegged at $735/mt FOB.
Pakistan:
According to local media reports, Pakistan is about ready to receive the first 50,000 mt of a 100,000 mt deal cut with China. After two failed attempts by TCP to purchase urea in open tenders, the Pakistan government engaged with the Chinese government for a deal.
Black Sea:
Limited production is affecting the availability of product at Yuzhnyy. Sources said the combination of high gas prices and tension between Russia and Ukraine is hurting output.
Sources have been calling the Black Sea market in the $700s/mt FOB, but with no spot material to test those offers. The public price remains in the $840s/mt FOB based on the last Indian tender.
Traders said few seem willing to talk with Russian producers for material to offer in the Indian tender. Not only are they seeing limited tonnage available, some are reportedly concerned that if Russia and Ukraine come to blows, sanctions against Russian interests could impact deals with Russian urea producers.
Turkey:
Imports of urea for 2021 were reported at 2.7 million mt, up 7 percent from 2020 imports of 2.5 million mt, according to Trade Data Monitor.
The main supplier was Oman with 1.5 million mt, accounting for 55 percent of the import market. Egypt sent 527,000 mt for 20 percent of the market, and Turkmenistan sold 283,000 mt for 10.5 percent of the market. Iranian sales to Turkey dropped to 186,000 mt in 2021, down 64 percent from 510,000 mt in 2020.
December 2021 imports were reported at 196,000 mt, up 76 percent from December 2020 imports of 111,000 mt. Oman, Turkmenistan, and Egypt sent a total of 141,000 mt in December 2021.
Brazil:
What started as a general softness in the market ended with upward movement in portside pricing. Sources reported deals at $540-$650/mt CFR.
The softness initially came as buyers stepped away from the market, forcing some sellers to lower prices to reduce inventories. The weekend announcement of an Indian urea tender, however, raised concern that urea that might be booked for March shipment to Brazil may end up going to India instead.
Prices in Rondonopolis also edged upward on word of the Indian tender. Sources now put the price at $750-$800/mt FOB ex-warehouse.