New Delhi: India has issued a global urea tender asking producers to quote a discount for the supply of 600,000 tonnes of urea, industry sources said and a document shows, as the nation seeks to cut import costs and secure cheaper supplies of the soil nutrient.
India, where soil nutrients are sold at below market rates, annually imports urea through tenders by authorised companies such as India Potash Ltd, Rashtriya Chemicals and Fertilizers Corp and National Fertilizers Ltd.
“This is the first tender where we are seeking quotes on discounts on the lowest price to be discovered through routine tenders … we are essentially locking in the discount number,” one of the sources said.
The tender seeking discounts on supplies in a year from March 1 will close on Jan. 23, with offers remaining valid until Feb. 5, the document shows.
Sellers will have to offer a discount in percentage terms that will be applied to the urea’s delivered price. Delivered prices are set through four to five routine tenders per year for supplies to India’s eastern and western coasts.
Urea producers directly, or through their “authorised exclusive marketer”, can participate in the tender, the tender document shows.
India aims to import about 4 million tonnes through routine tenders in a year from March, the source said, citing preliminary estimates.
The winner of this new tender will be assured of supply of an average of 50,000 tonnes of cargo every month to India, a second source said.
Higher global prices mean that India’s fertiliser subsidy bill for the financial year to March 31 will rise to a record 2.25 trillion Indian rupees ($27.2 billion) from about 1.5 trillion rupees the previous year.
Urea accounts for about 70% of India’s overall fertiliser subsidy.
($1 = 82.7310 Indian rupees)
(Reporting by Nidhi Verma; Editing by David Goodman)
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