India’s leading fertilizer importer receives bids for over 2.7 million tonnes of urea
India, recognized as the top importer of crop nutrients, faces a persistent challenge in meeting its urea demand, which currently is supplemented by imports accounting for 30% of its total needs. The country largely depends on supplies from nations including Oman, Qatar, Saudi Arabia, and the UAE. This import strategy is crucial for India, not only to bridge the gap in local production but also to maintain stockpiles essential for agricultural demands, thereby safeguarding the food security of its vast population.
In a significant development, National Fertilizers Limited (NFL), representing the Department of Fertilizer of the Ministry of Chemicals and Fertilizers, Government of India, has received a broad range of bids for its latest urea import tender. The tender, coded NFL/UREA/2023-24/01, was initiated for the procurement of prilled/granular urea with a minimum of 46% nitrogen content. The responses, varying in price from US$ 316.80 to US$ 355.50 CFR, were submitted for a total volume of 2.722 million metric tonnes. The tendering process, which started on 21 December 2023 and concluded on 4 January 2024, drew 21 bids and has set a delivery deadline of 29 February 2024.
The breakdown of the bids reveals a combined offer to supply urea on both the West Coast of India (WCI) and the East Coast of India (ECI). However, a single cargo offer of 50,000 metric tonnes was declined. The bids include 1.130 million metric tonnes for WCI and 1.147 million metric tonnes for ECI. In the fray for the contract are Fertcom, with a competitive bid of US$316.80 for WCI, and Agri Commodities, proposing US$3.29.40 CFR for ECI. To satisfy the substantial demand, the Indian government may opt for imports from multiple suppliers across various discharge ports in the country.
The tender also outlined specific requirements for the bidders. They were asked to quote for any quantity, but not less than 45,000 metric tonnes, with a 5% tolerance in shipping at the buyer’s discretion. Preference for discharge is given to a number of ports on both the East and West coasts of India, including Krishnapatnam, Gangavaram, Vizag, Kakinada Deep Water, Karaikal, Paradip, Adani Dhamra, Tuticorin, Mundra, Deendayal, Pipavav, Adani Tuna Bulk Terminal, Rozy, Adani Hazira, Adani Dahej, New Mangalore, and Jaigarh.
In the context of India’s urea imports, the fiscal year 2022-23 (April-January) saw the country spending US$5.1 billion to import 8.1 million tonnes of urea, a decrease from the 10.2 million tonnes costing $6.5 billion in FY22. The Indian government has allocated 1.75 trillion Indian rupees for fertilizer subsidies in the FY24 budget, a reduction from the 2.25 trillion Indian rupees in the revised estimate for 2022-23. This move highlights the ongoing efforts to manage the country’s agricultural inputs more effectively while navigating the challenges of global supply and demand dynamics.