U.S. Gulf: The granular barge market saw a boost on the week, with renewed interest said to be coming from all points on the river. Confirmed transactions for loaded and moving product were reported up to $358/st FOB, an $18/st hike from the previous week’s ceiling. Late-week offers were rumored in the $370s/st FOB.
On the low end, a handful of early-week buyers beat the run-up, inking $295-$305/st FOB barges set for loading in the first week of June. Prompt prices had firmed considerably by midweek, however, with sources quoting the new bottom around $320-$340/st FOB.
Product from a vessel in the process of discharging on May 28 was quoted at $350-$355/st FOB, and sources called barges for second-half June loading at $305-$340/st FOB. July granular was quoted around $250-$260/st FOB by a handful of sources.
Prilled urea was unchanged at $350-$355/st FOB.
Eastern Cornbelt: Granular urea pricing was steady at $425-$445/st FOB in the Eastern Cornbelt.
Western Cornbelt: Granular urea remained in a broad range at $390-$435/st FOB in the region, with the low reported in southern Missouri on a spot basis and the upper end in Iowa.
California: The granular urea market was softening in California. Sources quoted the dealer price at $460-$465/st FOB in the state, down $5-$15/st from last report. No current price quotes were reported for delivered urea in late May.
Pacific Northwest: Granular urea had reportedly slipped to $470-$480/st FOB Portland, Ore., down $15/st from last report. Sources said the price may fall further when more tonnage arrives in early June. Delivered urea was pegged at a nominal $500-$510/st in the region, with minimal new business to test the market.
Western Canada: The urea market in Western Canada was pegged at $710-$740/mt DEL for prompt tons, with reports of June sales at the $700/mt rail-DEL level.
India: Without any announcement during the IFA conference from India about urea purchases, industry watchers shifted their gaze to the new government.
The new head of the Chemicals and Fertilizers Ministry, Ananth Kumar, jumped right into his job by announcing that he was initiating steps to reopen all the closed urea plants in India. Local media reported that Kumar set a goal of making India urea self-sufficient during the term of the new government.
In the short-term, Kumar assured farmers that there would be no shortage of urea during the upcoming season. Weather predictions point to weaker rains this year because of the El Nino effect. Some of the delegates at the IFA conference, however, say their companies are expecting a regular monsoon season and strong urea demand.
When the next tender is called – most likely in mid-June – sources say India will not over-buy. The best bets at this time for the amount to be purchased is 1-1.2 million mt.
The big question for farmers is how the new government will deal with the subsidy issue. Media reports say that the new government is keen to cut back on subsidies for urea, either by wrapping it into the Nutrient-Based Subsidy plan or by slowly raising the set price of urea. Either step will affect how much urea farmers will be able to afford.
A producer at the IFA conference noted that the government has to move slowly on any urea pricing reforms. At the same time, he added, the government needs to increase its educational programs with farmers to wean them off urea and into using a more balanced nutrient regime. The reason farmers have not moved to other inputs, this producer said, is because the current subsidy program encourages the use of urea instead of other non-subsidized fertilizers.
The cost of the subsidies is a tou