US Gulf:
NOLA urea barges dropped as low as $508/st FOB early in the week, but quickly climbed back up to as high as $550/st FOB after news broke that India was calling another tender so soon after the last one. The week-ago range was $540-$570/st FOB.
Eastern Cornbelt:
The urea market was down significantly in the Eastern Cornbelt, fueled by falling NOLA barge prices. New terminal offers fell to $590-$625/st FOB in the region, well below the prior week’s $660-$680/st FOB range. The low was reported out of Ohio River terminals on a spot basis, while the Ottawa, Ill., market was quoted at the $610/st FOB level at midweek.
In the Great Lakes region, new urea offers FOB Toledo, Ohio, were confirmed at the $620/st level for November-December tons, down dramatically from last week’s $680/st FOB price.
Western Cornbelt:
Urea prices dropped to $600-$630/st FOB in the Western Cornbelt, down significantly from the prior week’s $650-$670/st FOB range, with the low confirmed at St. Louis, Mo., at midweek.
Southern Plains:
Urea pricing reportedly plunged to $605-$620/st FOB Catoosa/Inola, Okla., during the week, down considerably from the previous week’s $650-$670/st FOB range. Some sources said offers had bounced back up to $660/st FOB after NOLA barge prices firmed in response to the new Indian urea tender.
The Houston urea market was pegged at the $615/st FOB level at midweek, down from $670/st FOB in mid-October.
South Central:
The latest urea offers in the South Central region ranged broadly at $600-$670/st FOB in early November, depending on location, with the low reported at Convent, La. The Memphis, Tenn., market was pegged at $650-$655/st FOB at midweek, down $55/st from mid-October.
Southeast:
Urea pricing in the Southeast slipped to $660-$670/st FOB Wilmington, N.C., and other port terminals, down $15-$25/st from last report.
India:
Rumors were running wild early in the week that another Indian tender would be called soon. For once, the rumors were correct. National Fertilizer Ltd. called a tender to close Nov. 14 with a shipping deadline of Dec. 22. The technical and price envelopes from offering companies will not be opened until Nov. 15.
Sources expect to see slightly softer prices in the tender. Expectations are that NFL will try to take at least 1.5 million mt. So far this year India has purchased 6.1 million mt from tenders. In 2021 the country bought 7.9 million mt in tender, and in 2020 it bought 9 million mt.
Sources said to just stay even with demand, NFL will have to take the estimated 1.5 million mt. The tender documents did not specify a desired quantity, as did the recent IPL tender documents.
The buyer might have some wiggle room in how many tons it seeks. India has closed deals for tonnage to be supplied from OMIFCO outside the tender process. However, observers do not expect these tons to completely fill the gap between what is bought by tender and domestic production and the estimated demand. Government figures estimated demand is about 35 million mt/y, with production at 25 million mt/y. If NFL buys 1.5 million mt, that will take them close to the same levels as last year, but not enough to cover the supply and demand chasm.
The government announced that it expects to end all urea imports after 2025. The statement said existing production, combined with new facilities coming online in the next few months, combined with the use of nano urea, will be sufficient to cover domestic needs without imports.
Increased cost of fertilizers forced the Indian government to increase its budget for subsidies. Even though the cost to farmers has not changed, the difference between what is paid for imported urea and the farmers’ price changes with each new tender purchase. The government estimated that a 45-kg bag of urea would cost about $32 at market price. Farmers, however, only pay $3.21. The difference is covered by the urea subsidy.
Sources reported numerous issues distributing the urea that has already arrived. They noted protests around the country that were related to delays in distributing urea and DAP. One trader said the urea purchased in the NFL tender is probably going to be used to build inventory for next year, because December shipments will most likely not be able to reach the farmers in time for the current season.
Pakistan:
The government authorized TCP to accept the low offer in its 300,000 mt urea tender. Makhtom Logistic International offered the full quantity at $520/mt CFR.
Sources said finding any urea at that price will be difficult, if not impossible. China and the Arab Gulf urea prices are pegged in the $620s/mt FOB, based on the last Indian tender. They are not asking more than that from spot buyers. Black Sea material might work if Makhtom can find a way to secure Russian urea in a timely manner. The whole 300,000 mt must be delivered by the end of December, or Makhtom will lose its 5% performance bond and possibly additional costs as determined by TCP.
The tight schedule and concern over timely payments outlined in the tender documents kept most of the major international trading houses away from the tender. Only three companies participated.
The shooting of former Prime Minister Imran Khan has put much of Pakistan in chaos. Sources wondered if the situation would allow for the tender documents to be processed in a timely manner, including timely issuance of the letter of credit for the tonnage ordered. One trader speculated the tender may end up getting scrapped.
Egypt:
Prices started the week low at $545/mt FOB for 50,000 mt to a non-European buyer. As the days passed, prices moved up sharply to close out at $630/mt. All shipments were for either late November or early December.
| Producer | Quantity (mt) | US$/mt FOB |
| Monday | ||
| MOPCO | 50,000 | 545 |
| Tuesday | ||
| Helwan | 6,000 | 580 |
| KIMA | 10,000 | 582 |
| AlexFert | 6,000 | 580 |
| Alexfert | 5,000 | 585 |
| Alexfert | 5,000 | 590 |
| MOPCO | 5,000 | 615 |
| MOPCO | 5,000 | 615 |
| Wednesday | ||
| AlexFert | 5,000 | 625 |
| AlexFert | 5,000 | 630 |
European buyers have been reported to be anxious to secure tons from outside to make up for their own lost production due to high natural gas prices forcing plants closed.
Indonesia:
Persero, the holding company for the ammonia and urea producing companies in Indonesia, signed an MOU with Fertiglobe that will allow Persero to have access to the Fertiglobe global distribution network and to handle global sales of Indonesia urea. At the same time, Persero opened a trade office in Dubai.
In a press release, Persero said the representative office and MOU will ease access to raw materials for NPK production as well as secure new global markets for Indonesian product.
January-September 2022 exports of Indonesia urea were reported at 1.5 million mt by Trade Data Monitor, down about 13% from the 1.7 million mt exported during the period in 2021. The main buyers were Australia with 338,000 mt, and India with 280,000 mt. European buyers, facing the shutdown of their own plants due to high natural gas prices, took 72,000 mt, compared with no tons during the same period last year.
Third-quarter exports were reported at 639,000 mt, down slightly from the 658,000 mt exported during the same period in 2021.
September 2022 exports were reported at 196,000 mt, up 39% from the 141,000 mt exported during September 2021. No single buyer dominated the market. The Philippines took 33,000 mt for 17% of the exports, followed by Argentina with 29,000 mt for 15% of the market. The 72,000 mt taken by European buyers all happened during September.
Brazil:
The high stockpiles of urea in Brazil, coupled with the political unrest that followed the Oct. 30 presidential election, led to a slight drop in urea prices in Brazil, to $580-$630/mt CFR.
The price in Rondonopolis remained relatively stable at $740-$790/mt FOB ex-warehouse. Sources said farmers spent the week demonstrating in support of defeated presidential candidate Jair Bolsonaro, and distributors saw roads blocked to protest his loss, leaving few reasons to engage in trading.
October urea imports were reported at 597,000 mt, down from the 862,000 mt imported during October 2021. January-October imports were pegged at 5.8 million mt, about 7% down from the 6.2 million mt imported during the same period in 2021.
Malaysia:
January-September 2022 urea exports were reported at 1.4 million mt by Trade Data Monitor, down about 7% from the 1.5 million mt exported during the same period in 2021. Australia dominated the purchases with 402,000 mt, followed by Thailand with 298,000 mt, and India with 131,000 mt.
Third-quarter 2022 exports were reported at 554,000 mt, up 22% from the 455,000 mt exported during the same period in 2021.
September 2022 exports were reported at 248,000 mt, up dramatically from the 134,000 mt exported during September 2021. Australia took 44% of the exports at 108,000 mt. Chile with 33,000 mt accounted for 13% of the export sales, followed by New Zealand with 30,000 mt for 12% of the market.
Turkey:
January-September 2022 urea imports were reported at 1.6 million mt by Trade Data Monitor, down about 18% from the 2 million mt imported during the same period in 2021. The main supplier was Oman with 897,000 mt.
Third-quarter 2022 imports were reported at 627,000 mt, up 10% from the 568,000 mt imported during the same three months of 2021. Imports during the third quarter also represented a substantial leap over the 529,000 mt imported in the first quarter and the second quarter imports of 477,000 mt.
September 2022 imports were reported at 154,000 mt, down about a third from the 226,000 mt imported during September 2021. Oman accounted for 83% of the imports with 128,000 mt.
Thailand:
January-September 2022 urea imports were reported at 1.5 million mt by Trade Data Monitor, down about 18% from the 1.9 million mt imported during the same period in 2021. Saudi Arabia was the largest supplier with 598,000 mt, followed by Qatar with 341,000 mt, and Malaysia with 339,000 mt.
Third-quarter 2022 imports were reported at 584,000 mt, down from the 677,000 mt imported during the same three months in 2021. September 2022 imports were pegged at 79,000 mt, down drastically from the 285,000 mt imported during September 2021.
Black Sea:
Sources reported a slight increase in the price of Black Sea prilled urea. The increase came on the lower end of the price range to $500-$525/mt FOB.
Middle East:
Sources said the current price under discussion for Arab Gulf material is now $610-$620/mt FOB. However, no new spot deals were reported at that level.
China:
Indications of new and higher prices are coming out of China for the limited tonnage being sold. Sources said producers are now asking $680-$700/mt FOB for their product. So far, no deals have been confirmed at the higher rate, leaving the price at the level calculated from the last Indian tender in the upper $620s/mt FOB.