US Gulf:
New NOLA urea barge business was quoted in the $620-$672/st FOB range, down from the week-ago $640-$687/st FOB. Early-week business was reported toward the high end of the range, but $620/st FOB was a common number by midweek.
Eastern Cornbelt:
Fueled by additional softening in NOLA barge pricing, the regional urea market slipped to $695-$705/st FOB Cincinnati, Ohio, down sharply from last week’s broad $715-$745/st FOB range. Sources also confirmed spot pricing out of Illinois River terminals at the $700/st FOB level during the week.
Western Cornbelt:
Urea pricing during the week reportedly dropped to $675-$680/st FOB St. Louis, Mo., down from a broad $690-$725/st FOB at last report. The top of the regional market continued to be quoted as high as $725/st FOB Caruthersville, Mo.
Southern Plains:
Urea prices were falling in the Southern Plains. The Catoosa/Inola, Okla., market was pegged in a broad range at $680-$710/st FOB, down from the prior week’s $710-$730/st FOB, with the lower numbers reported later in the week. Urea offers FOB Houston, Texas, were quoted at the $725/st FOB level at midweek.
South Central:
The urea market was pegged at $710-$740/st FOB in the South Central region, with the low confirmed at Memphis, Tenn., and the high at Little Rock, Ark. While the last confirmed business at Convent, La., was reported at the $685/st FOB level at mid-month, sources said tons were sold out at that location during the week.
Southeast:
Urea prices were unchanged at $700-$725/st FOB port terminals in the Southeast, depending on location.
India:
Sources said India will need at least two more tenders to close out the year. One trader said the country needs at least 3 million mt to close out the season. Anything less could put the country into panic buying mode for the next season, said another trader.
The next tender is expected to be called in mid-October. The call could come earlier if all the tonnage awarded in the recent RCF tender has nominated vessels. The shipping deadline for the RCF tender is Oct. 21. Sources expect to see higher prices in the next tender.
January-July 2022 imports of urea were reported at 5.8 million mt by Trade Data Monitor, up 62% from the 3.6 million mt imported during the same period in 2021. The top five suppliers accounted for 3 million mt.
| Supplying Country | Quantity (mt) |
| Oman | 971,000 |
| China | 699,000 |
| Saudi Arabia | 486,000 |
| United Arab Emirates | 462,000 |
| Qatar | 457,000 |
Russia was officially the sixth major supplier with 435,000 mt. Sources said, however, the 319,000 mt identified as coming from Finland were also most likely from Russia, for a total of 744,000 mt. The tonnage reportedly from Finland, said one trader, probably was railed in and re-exported.
July 2022 imports were reported at 1.1 million mt, up marginally from the 1 million mt imported during July 2021. The main suppliers were China with 579,000 mt, for 51% of all urea imports, followed by Russia with 139,000 mt, representing a 12% share of the import market.
An estimated 3.7 million mt should have been delivered to India by July 2022, according to a count of tonnage purchased under tenders. The remaining tonnage, said sources, is most likely tied to the long-term contract signed between the Indian government and OMIFCO. Steady cargoes from the Omani company are expected each month.
Russia/Black Sea:
Shipping line-ups showed July urea exports from Russia at 255,800 mt. Trade Data Monitor does not have any numbers for July 2022, but reported the July 2021 exports from Russia at 499,000 mt. Many of the tons were being shipped out of Russian ports in the Baltic Sea. Exports from the Black Sea are largely limited to ports in the east because northern ports are in the war zone.
Material from Georgia, Uzbekistan, and other countries to the east of the Black Sea are pegged at $700/mt FOB. Russian urea coming out of the Black Sea is reported at $527-$530/mt FOB. Sources said the lower price is an inducement for buyers to take the tons.
Even though fertilizer is not covered by the sanctions imposed on Russia by the US and EU, traders are nervous about handling any Russian material in case the rules change. Already the EU has imposed sanctions on financing and insuring vessels loading at Russian ports. As a result, finding vessels to take the Russian urea is difficult.
Traders noted that Iran has found ways to work around the sanctions imposed against it because it has had more than 10 years to find ways to get their urea into the global market. Handlers of Russian product are still learning maneuvers such as how to swap paperwork to get past the Western sanctions.
There are reports that some urea railed from neighboring countries to the eastern Black Sea ports was diverted. Sources said the Russian rail lines reportedly forced some fertilizer-laden rail cars to a siding so the Russian military could use the lines to move military equipment and personnel. One trader said his cargo was delayed about a day.
Indonesia:
No new sales were reported out of Indonesia. Sources said the focus now is to move out the tons already booked. The lack of business keeps the price at $675/mt FOB for granular urea.
The European market continues to be a magnet for urea. Sources said the high price to produce urea in Europe has led companies to look for material elsewhere for imports. Egypt has long been a major supplier. However, in recent months Indonesia and Malaysia have also appeared on the radar screen.
Sources said the combination of freight costs, ship availability, and softer prices in Southeast Asia has led traders to look for deals from that area into Europe. Last month the United Kingdom took a cargo from Indonesia. Sources now report that another cargo from Malaysia is bound for Europe. In both cases, the deals were handled by traders.
While regular shipments are not expected, sources said more Southeast Asian urea could be finding its way into Europe as long as European prices remain high.
Middle East:
Sources said Arab Gulf producers were quiet as they processed the paperwork to ship out awards from the RCF tender and handle their long-term contract sales.
The paper market for the Arab Gulf into the fourth quarter is reportedly at $680/mt FOB. This would represent an increase over the current price, based on the RCF tender. A price increase is expected on the heels of the next Indian tender.
Egyptian producers were also quiet. The lack of any new business denied any price sampling out of the country, leaving the price at the $850/mt FOB level set last month. Sources said the netback to Egypt from India, based on the RCF tender price, would be $640-$650/mt FOB. However, buyers and sellers agree this is too low for Egyptian product.
Strong demand in Europe for imports will keep upward pressure on the Egyptian price. However, buyers are also finding that there are other suppliers who could replace the Egyptian tons at lower prices. Sources expect to see the price come down from the $850/mt FOB soon, but then go up again. Some are estimating the Egyptian price could return to the $900s/mt FOB in the fourth quarter.
For now, however, the paper market is calling the fourth quarter at $750-$780/mt FOB. Traders said they would be happy to secure a cargo at $760/mt FOB, but added that they doubt if such a deal could be made.
China:
Reports are circulating that some of the smaller producers are quietly moving tons to portside warehouses in the hope that they will get clearance to export the material. Sources said quiet inquiries are circulating among international traders, many of whom are skittish about making a deal unless all the proper customs paperwork is completed.
January-August 2022 urea exports were reported at 1.2 million mt by Trade Data Monitor, down 58% from the 2.9 million mt exported during the same period in 2021. India has dominated the buyers so far this year, taking 332,000 mt. This is down dramatically from the 1.1 million mt sent to India in January-August 2021. Other buyers this year were South Korea with 269,000 mt, and Pakistan with 204,000 mt.
August 2022 exports were reported at 351,000 mt, down 34% from the 261,000 mt exported during August 2021. Pakistan topped the buyers with 103,000 mt, for 29% of the exports. India took 98,000 mt for 28% of sales, followed by South Korea with 55,000 mt for 16% of the exports.
Pakistan:
International traders said the devastating floods in Pakistan have probably eliminated any possibility of a successful harvest this season. The government would do well to focus on purchasing more food on the global market instead of trying to replace the fertilizer lost in the disaster, said one trader .
Sources said there will most likely not be enough time to plant and harvest crops once the flood waters recede. Besides damages to the field, stored fertilizer in flooded warehouses is also damaged. The next season will require more purchases to supplement domestic production, said sources.
Brazil:
Urea prices took a quick slide this week. While early-week quotes were as high as $750-$760/mt CFR, by the end of the week sources put the range at $670-$720/mt CFR.
In midweek, sources reported a deal in Rio Grande that showed a netback to the ports of $700/mt FOB ex-warehouse. Sources were clear that the product was not Iranian, which has seen quotes at $700/mt CFR portside.
Reportedly, a possible push for lower prices came after urea from Oman and Algeria was offered at $660/mt CFR because the countries were looking to liquidate large inventories projected for the fourth quarter. The low offers came just as buyers were pushing for reduced prices. Buyers reportedly snapped up the deals quickly.
The paper market could barely keep up with the actual market. Sources reported the initial price projection was $740/mt CFR, to quickly drop to $685/mt by midweek. Sources said $650/mt CFR is expected over the weekend.
Even after the dramatic slide, sources said they are unsure about the direction of the urea market. International traders said Brazilian demand, combined with US and Indian needs, should be enough to hold the line on pricing into the last quarter of the year, and even push prices a bit higher. An apparent lack of demand in Brazil, however, is pushing the price down just as the rest of the world is poised to go up.
Rondonopolis is pegged at $850-$865/mt FOB ex-warehouse, but that is expected to drop after the dramatic slide in CFR prices. The Rondonopolis market is similar to that of Rio Grande, where the deal at $700/mt FOB ex-warehouse began the slide in prices.
Lack of demand remains a major problem for sellers. Weak rainfall in Mato Grosso has farmers hesitant to step up to buy product for the upcoming season.