U.S. Gulf: Prompt granular trades last week were generally reported between $288-$298/st FOB. While there was one report as low as $284/st FOB, market skeptics said it was more likely for late March or April. April was called as low as $290/st, and May was called $285/st FOB.
Still others argued that as the week ended, pricing ideas were getting higher, with $300-$302/st FOB reported for all of March.
Prills continued to be quoted in the $315-$320/st FOB range.
Eastern Cornbelt: Granular urea was quoted at $350-$365/st FOB in the Eastern Cornbelt, down $5-$10/st from last report, with the low end reported out of both Ohio and Mississippi River terminals on a spot basis.
Western Cornbelt: Fueled by a softening NOLA barge market, the granular urea market had reportedly slipped to $355-$365/st FOB in the Western Cornbelt, down some $10-$15/st from last report.
California: The granular urea market was steady at $400-$405/st FOB import terminals in California.
Sources speculated that the terminal market could drop if pressure builds from rail-delivered tons coming into the state. Some contacts speculated that railed tons could possibly be had for sub-$400/st levels in early March, but the market remained untested.
Pacific Northwest: Granular urea was quoted at $390-$400/st FOB port terminals in the Pacific Northwest, with rail-delivered urea pegged at the $420/st level for tons from Canada.
Western Canada: Granular urea was pegged at $645-$670/mt DEL in Western Canada, reflecting a slight increase from last report, with the low reported in Manitoba and Saskatchewan and the upper end in Alberta and British Columbia.
India: Rumors are circulating that a new tender may be called in the next week or so. Sources say the drop in the global urea market is most likely driving these rumors.
Sources say bids into China are now in the $270s/mt FOB for prills, with offers in the low $280s/mt FOB, despite the producers’ official claims of prices in the $290s/mt FOB.
India rarely holds a tender just before the new fiscal year begins on April 1. Sources note that it has been done, but mostly at times when the country was short on urea. This year the latest tender is bringing in more than enough tons to satisfy any late demands for the current application season, and also to provide enough reserve stocks to kick off the next season.
The parts of the new budget that have surfaced show little change in urea policy. The government is asking for a minor increase in urea prices, and has announced that it will look at ways to shift payment of the subsidies to the farmers instead of to the producers and importers.
Earlier discussions of including urea in the Nutrient Based Subsidy (NBS) plan, which would allow for urea prices to rise dramatically, were scrapped for this year. According to media reports the government has not ruled out making the shift, but they want more time to study the impact it would have on farmers’ income and food production.
One international trader was skeptical of a tender being called this month. He said the government still owes subsidy payments to domestic producers. Being in arrears of subsidy payments is not new to the government. Estimates are the final payment for 2014 subsidies will not be made until the end of April.
The high cost of fertilizer subsidies in general – and of urea in particular – is the motivating force to change how urea and subsidies are handled.
India is facing the additional problem of a strong U.S. dollar, which makes the cost to the government that much higher.
China: Producers maintain a public mien tha