In a first, India to import large quantity of urea from the US
The South Korean conglomerate Samsung is about to load 47,000 tonnes of granular urea at New Orleans port in the US for shipment
India is, for the first time, going to import a substantial quantity of urea from the US.
The South Korean conglomerate Samsung is about to load 47,000 tonnes of granular urea at New Orleans port in the US for shipment to New Mangalore in India's west coast.
The cargo is to be supplied at a price of $716.5 per tonne, cost plus freight (CFR). With freight costs from the US estimated at about $65 in addition to $10-15 for loading from barges, the corresponding free-on-board or FOB origin price will work out to $635-640 per tonne.
The US has till now been only an occasional urea exporter. Commerce Ministry data shows its exports to India at a mere 1.47 tonnes in 2019-20, 2.19 tonnes in 2020-21 and 43.71 tonnes in 2021-22.
The 47,000 tonnes quantity, for which loading is expected to begin later this week, is against an import tender by Rashtriya Chemicals & Fertilisers Ltd.
The state-owned company's global tender, floated on May 11, resulted in 1.65 million tonnes (mt) of urea being contracted from different suppliers for delivery in both west and east coast ports at $716-721 per tonne CFR.
India, in 2021-22, imported 10.16 mt of urea valued at $6.52 billion. The imports were mainly from China (2.79 mt), Oman (1.62 mt), United Arab Emirates (1.06 mt), Egypt and Ukraine (0.75 mt each), Qatar (0.58 mt) and Saudi Arabia (0.50 mt).
Buying more from the US also makes sense in the current context. The FOB prices of granular urea (US Gulf futures) are trading at $500 per tonne for June and $455 for July delivery.
These are much above the corresponding futures FOB quotes of $610 and $595 per tonne for Middle East urea.
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