India seeks 2.5 million metric tons of urea amid Middle East supply disruptions

MUMBAI: India, the world’s largest urea importer, is looking to purchase 2.5 million metric tons of the key crop nutrient to shore up domestic supplies, which have tightened due to the U.S.-Israeli war with Iran.

State-run Indian Potash Ltd (IPL) issued a tender on Saturday to import 1.5 million tons via the country’s west coast. The remaining 1 million tons will arrive through the east coast, according to the document posted on the company’s website.

Shipments are expected to leave the load port by June 14, it said.

Bids for the tender must be submitted by April 15.

India routinely relies on global tenders to secure urea for domestic consumption. The imports are critical as planting for rice, corn, and soybeans is scheduled to begin in June with the arrival of the monsoon.

India, where farming is a mainstay, imports fertilisers such as urea, diammonium phosphate (DAP) and muriate of potash, as well as liquefied natural gas, a key feedstock for urea production.

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The Gulf region accounts for 20% to 30% of India’s urea imports and about 50% of its LNG imports, which is used to produce urea domestically, Aparna Sharma, additional secretary in the Department of Fertilisers, told reporters last week.

India’s urea production fell last month due to limited gas availability following the start of the Middle East conflict, though supplies to urea plants have improved in recent weeks, she said.

A Mumbai-based industry official said local urea production dipped by about 600,000 to 700,000 tons per month, with imports expected to help offset some of the decline.

“But global surplus is limited due to supply disruptions in the Middle East. It will be interesting to see who participates in the tender, as that will determine pricing,” the official said.

In the November tender, IPL secured urea at $418.40 per tonne on a cost-and-freight (CFR) basis, but prices have since risen due to the conflict, and the Indian tender is likely to set a benchmark for other buyers, said a New-Delhi-based official with a leading fertiliser company.