U.S. Gulf: Prompt business over the holidays was reported to have started as low as $340-$345/st FOB and finished in the $350-$353/st FOB range. It may have gone higher, but fewer players were around to actively trade.
Prills remained strong, with the last done business called $340-$342/st FOB. Suppliers were quoting $345-$350/st FOB for the next round of business, but with no takers so far. Product remains limited, with no word of any resumption of production in Libya.
Eastern Cornbelt: Granular urea pricing was up slightly at $375-$385/st FOB in the Eastern Cornbelt, with the upper end quoted for spring prepay offers.
Western Cornbelt: The granular urea market was up slightly at $375-$385/st FOB in the Western Cornbelt, with that range also quoted for spring prepay tons.
California: Sources continued to report the low end of the granular urea market in California at $385/st FOB Stockton from some suppliers, but others were reportedly moving to the $400/st FOB level to reflect the firming NOLA barge market.
Pacific Northwest: The granular urea market was quoted at $390-$400/st FOB Rivergate, Ore., up $15-$20/st from last report. Delivered urea was quoted in the $405-$415/st range in the Pacific Northwest.
Western Canada: Rail-delivered urea pricing in Western Canada had reportedly firmed to $520-$525/mt for spring prepay.
India: The industry is still waiting for India to step up and start buying again. Sources maintain that the country still needs about 1.3 million mt of urea to close out the current application season and to prepare for the next.
One trader said it was becoming clear that while India needs the tons, it is not desperate for them.
If an Indian buyer calls a tender, it will have to demand quick loading if it wants to depend on Chinese material. The change in the Chinese export regime could make Chinese urea competitive. The issue will be getting the tonnage shipped.
The Chinese New Year comes early this year – Jan. 31. In general, workers take time off the week before and after the Lunar New Year. Getting vessels loaded in January will be difficult. One source said nothing much can be expected to leave Chinese ports until Feb. 15.
Shipment from China in mid-February would be helpful for laying in stockpiles for the next application season, but will do little for the current season.
Also, said one trader, Chinese producers are now asking $360-$370/mt FOB for granular. While no one is biting at that level, the price is not good news to the Indian buyers or government.
During the break in ordering, the Indian government started talking about making changes in the subsidy program for urea. Unfortunately for those in the finance ministry, any efforts to reduce the amount of subsidies paid were blocked because of political pressure.
Farmers saw prices rise for P & K fertilizers once the Nutrient-Based Subsidy (NBS) program kicked in three years ago. Urea was left out of the NBS plan, much to the joy of farmers who swear by urea for their crops.
Urea currently is sold to farmers at US$86.12/mt. The last imported price was about $340/mt. The difference is made up with subsidies. The government is currently in arrears in its subsidy payments to local producers and distributors of urea to the tune of US$5.8 billion.
The subsidy costs will be proportionately higher as the global market price rises.
One of the major trading houses in India – India Potash Ltd. (IPL) – got into a kerfuffle with Nepal. Nepalese government inspectors said a recent cargo of urea sold by IPL was substandard. The government inspector said too much moisture was allowed to enter the bags, causing lumping and