U.S. Gulf:
NOLA granular urea barges were reported to have traded within the $750-$800/st FOB range, with the higher end concluded at the beginning of the week. This compares to the week-ago $740-$880/st FOB.
Since there have been no new prill trades for a while, players said any new pricing would likely fall somewhere within the current granular range.
U.S. Exports:
Urea exports from the U.S. in February were up 350.2 percent, to 102,364 st from the year-ago 22,737 st. Exports totaled 340,448 st for July-February, however, off 43.8 percent from the prior year’s 605,739 st.
Eastern Cornbelt:
Urea prices in the Eastern Cornbelt appeared to back off even more this week, fueled by low demand and continued softness in the NOLA barge market. Sources quoted the regional market at $835-$865/st FOB, with the low confirmed in Illinois. The Cincinnati, Ohio, market was pegged at $860-$865/st FOB, down from $900-$935/st the week before.
Western Cornbelt:
Sources reported very little fieldwork in the Western Cornbelt, and urea prices continued to fall as “wet conditions prevail.” The market was quoted at $800-$850/st FOB at mid-month, down from the prior week’s $850-$910/st FOB range, with the high confirmed in the Iowa market. St. Louis, Mo., urea pricing was pegged in the $800-$835/st FOB range.
The St. Paul, Minn., urea market was quoted at $845-$855/st FOB during the week, while pricing FOB Catoosa/Inola, Okla., fell in the $835-$845/st FOB range.
California:
The urea market in California was quoted in a broad range at $960-$1,025/st FOB at mid-month, up from $960-$1,010/st FOB at last report. The low end of the range was confirmed at West Sacramento and remained unchanged, while pricing at Stockton had reportedly firmed to $990-$1,025/st FOB. Bagged urea tons remained as high as $1,060/st FOB West Sacramento.
Pacific Northwest:
The urea market was steady at $990-$995/st FOB in the Pacific Northwest. No current delivered prices were confirmed at mid-month.
Western Canada:
The urea market appeared to be slipping in Western Canada, fueled by softer NOLA and Midwest pricing. Delivered pricing was quoted in the C$1,280-$1,350/mt range, down from C$1,350-$1,400/mt in late March. On an FOB basis, the regional market reportedly fell to C$1,230-$1,345/mt, down from C$1,320-$1,390/mt FOB at last report.
India:
Sources continued to expect that a urea tender could be called any day. Reportedly, part of the delay comes from the Indian government trying to put together a package that will allow for Russian urea to be purchased under a rupee-ruble exchange, independent of the U.S. and European banks. A similar arrangement is how India is getting Russian oil, said sources.
Industry sources, however, said the process is not as easy for fertilizers. Also, finding vessels willing to enter the Black Sea war zone to pick up the product would be difficult, said one trader. Some international traders said the rumor of the exchange system is more posturing by the Indian government than an actual possibility.
In the meantime, the government is reported to have established a special committee to analyze current market conditions and decide if changes to the 2022/23 budget need to be made to cover the higher urea prices and the subsequent higher subsidies for urea.
Black Sea:
Vessel activity in and out of the Black Sea is mostly limited runs to Georgia on the eastern edge of the Black Sea, or stops in Turkey, Bulgaria, or Romania at the entrance. The closure of the Ukrainian ports has cut off any market exploration. In addition, the presence of Russian war ships throughout the northern reaches of the Black Sea has ship owners nervous about sending their vessels into the area.
Sources said traders are talking about different prices, but none of that talk is based on actual deals. One trader said he doubts that anyone is actually talking to possible exporters about their pricing ideas, knowing that the ports are closed.
Indonesia:
The deal last week that moved the price to $945/mt FOB seems to have fallen apart. The price came from a tender offering 30,000-45,000 mt of granular urea from Kaltim. Reportedly the bids were too low, so the tender was scrapped and private talks followed.
So far, this is normal practice in Indonesia. In the private talks, a buyer was reportedly ready to take 45,000 mt at $945/mt FOB. When it came time to finish the deal, however, the buyer scampered. Sources said Kaltim called around to other trading houses that participated in the tender to see if they were interested. No one agreed to take over the deal.
Sources said the reluctance of the traders came as reports circulated that prices were softening, and that $945/mt FOB would be too high for any buyers in the area.While buyers now argue for lower prices under $900/mt FOB, producers are digging in their heels for prices in the $900s/mt FOB.
Middle East:
Details of a spot deal that closed several weeks ago are now being made public. Reportedly, a producer sold a cargo at $950/mt FOB for April loading.
The price was not surprising to global traders. Rumors of softer prices in the Arab Gulf have been circulating for a while. Sensing further price drops, sources reported that some potential buyers are now bidding in the upper-$700s/mt FOB. Producers are rejecting this number, arguing that prices should at least be in the $900s/mt FOB.
No new business was reported from Egyptian producers, leaving the price at $1,130/mt FOB. Reportedly, there is a big push for lower prices. Buyers are now bidding at $900-$950/mt FOB, while producers are digging in their heels at $1,000/mt FOB.
China:
Restrictions on exports are expected to last well into July. Sources said even with the lifting of the official restrictions in May, customs officials will still have final say about how many tons will be allowed to be exported.
These officials will be looking at the estimated demand for urea, as well as current and forecasted stockpiles. Most traders expect only a small portion of the once-robust export trade to happen. Sources said June and July may see a slight easing of the restrictions, but there will not be a fully open export market any time soon.
The only large quantities that have come out of China have been under government-to-government arrangements. Pakistan took about 100,000 mt in February, according to Trade Data Monitor, after such a deal was cut. Total exports in January were only 85,000 mt. December shipments were only 35,000 mt.
Most of the sales during the export restriction period have been to countries needing urea more for industrial or environmental reasons than for agricultural use. These small shipments were done in containers, rather than via bulk carriers for ease of handling.
Brazil:
The urea market in Brazil reflected softer prices seen in other major markets. The landed price is now pegged at $880-$930/mt CFR, with most of the deals taking place under $900/mt CFR.
Sources said besides the global push for lower prices, this time of year is usually when Brazilian urea prices soften. The few buyers in the market appear to be picking up tons to position themselves properly for the 2023 corn season. Farmers remain hesitant to buy just yet, expecting further price declines.
Rondonopolis was reported with a tighter price range than in previous weeks, with the market quoted at $1,060-$1,150/mt FOB ex-warehouse.
Urea imports for the first quarter were reported at 1.6 million mt, down about 17.5 percent from the 1.97 million mt imported during the same period in 2021, Trade Data Monitor reported that Nigeria led with 375,000 mt, up 160 percent from its sales in 2021. Oman, Russia, Qatar, and Algeria rounded off the top five suppliers.
March 2022 imports were down 32 percent from March 2021, at 480,000 mt. Nigeria supplied one-third of the urea imported in March at 159,000 mt. Russia and Qatar each had another 13-15 percent of imports, leaving Oman with 10 percent of the import market.