India to import record 2.5 million tons of urea

The record purchases, covering about a quarter of India's annual imports, are set to tighten global supply and push prices higher, which have already surged due to the war in the ​Middle East.

Indian Potash Ltd (IPL) has agreed to buy 1.5 million tons of urea ​at $935 per ton for delivery on the west coast, and an additional ⁠1 million tons at $959 per ton for delivery on the east coast, the sources said, ​declining to be named as they were not authorised to speak to the media.

India, the world's ​biggest urea importer, issued the tender earlier this month to secure 2.5 million tons of the fertiliser, or nearly a quarter of its annual imports of about 10 million tons in 2025.

Reuters last week reported ​that the lowest offer in the IPL import tender was $935 per ton for west coast ​delivery on a cost-and-freight basis, and $959 per ton for the east coast.

IPL received offers to supply 5.6 million tons ‌of ⁠urea in the tender, with only a small portion priced at $935 a ton, while most bids clustered around $1,000 and climbed as high as $1,136.

IPL agreed to buy 2.5 million tons of urea after suppliers matched the lowest bid.

"Many suppliers agreed to match the lowest bid offered for both ​west and east coast ​shipments, which is ⁠why the entire 2.5 million ton purchase was possible," one of the sources said.

Shipments under the tender must depart the load port by ​June 14, the tender document said.

In the previous urea tender issued by ​India's Rashtriya ⁠Chemicals and Fertilizers, bids were $508 per ton for west coast delivery and $512 per ton for east coast delivery.

Higher import costs will push up India's fertiliser subsidy bill, as the government compensates fertiliser ⁠companies for ​selling crop nutrients to farmers at below-market prices.

India secured ​supplies, but other buyers are expected to scramble to secure fertilizer as producers have already committed shipments to India, ​said a Mumbai-based fertilizer industry official.