A closely-watched urea tender in India — the world’s top buyer of the nitrogen-based fertilizer — drew offers near $1,000 a ton, in a fresh sign of how the Iran war is sending prices for the crop nutrient surging.
Aramco Trading Co. and Ameropa Asia Pte. were among more than two dozen suppliers offering urea to India, as post-conflict price gains spur stockpiling before a key planting season.
Indian Potash Ltd., which imports the crop nutrient for the government, received offers for 3.29 million tons against a 1.5 million-ton tender for the west coast, with prices between $935 and $1,136 a ton, according to people familiar with the matter.
For the east coast, submissions totaled 2.63 million tons against a 1 million-ton requirement, with offers between $959 and $1,136 a ton, they said, asking not to be identified due to the commercial sensitivity of the information.
Urea prices from the Middle East, typically a major global supplier to India, were quoted at $490 a ton before the war began, Green Markets data show. The latest offers are about double the pre-conflict spot levels.
A fertilizer ministry spokesperson didn’t immediately respond to an email seeking comment.
Indian Potash had issued a tender to collectively procure 2.5 million tons earlier this month, the first such purchase for the country since the start of US-Israeli strikes on Iran. The timing is crucial as sowing for key monsoon crops, including rice, corn and soybeans, is set to begin in the coming months.
“India’s tender came in with prices toward the higher end of market expectations,” said Alexis Maxwell, a senior analyst with Bloomberg Intelligence. Today’s market reflects an extreme supply shock, she said, adding that the offer price will become a benchmark for other importers globally.
The South Asian nation’s urea output depends heavily on natural gas, much of it sourced from the Middle East and used to produce ammonia, a key feedstock. A shortage of liquefied natural gas following the effective closure of the Strait of Hormuz forced some regional firms to idle plants last month. Indian authorities are in talks with major producers and exporters of nitrogen-based and phosphatic fertilizers to secure direct supplies.
Global urea prices have surged since the start of the war as nearly 45% of global supplies pass through the Persian Gulf, according to Bloomberg Intelligence. Any prolonged shutdown risks driving prices even higher.
Disclaimer: This report is auto generated from the Bloomberg news service. ThePrint holds no responsibility for its content.
Wars are such fine business for so many and hence the world is always lazy at stopping them.