Global fertilizer shock cools as India's urea tender draws low bids

The global fertilizer supply shock triggered by the war in Iran may finally be losing its steam. India, the world’s largest urea importer, saw prices plunge to less than half of their April peaks in its latest procurement round, signaling a significant reprieve for international agricultural supply chains. State-run National Fertilizers received offers of up to USD 617/ton for its 1.7 mn tons of urea tender that closed on Monday, Bloomberg reports.

The latest offers are well below India’s April purchase level of USD 935-959/ton. The decline points to some easing from the price spike at the height of the Iran war.

Supply surplus: The latest tender also points to adequate supply for Indian buyers. National Fertilizers received 3.1 mn tons in offers against a 900k-ton target for deliveries along the west coast. Lower prices for urea could help India control its fertilizer subsidy bill, even as the country buys more spot liquefied natural gas (LNG) to support domestic urea production.

The tender comes during the June-September sowing season, when farmers plant rice, corn and soybeans. India needs about 38.4 mn tons of fertilizer for the rainy-season crop cycle, while inventories stand at about 19.8 mn tons.