New Delhi: India is poised to make a record purchase of 2.5 million metric tonnes of urea in a single tender, as rising geopolitical tensions in West Asia and supply disruptions push fertiliser prices sharply higher in the global market.
According to reports, the massive procurement nearly a quarter of India’s annual urea imports is expected to tighten international supply further and add upward pressure on already surging prices.
Sources indicate Indian Potash Ltd (IPL) has agreed to import 1.5 million tonnes of urea at USD 935 per tonne for delivery on the west coast, while another one million tonnes has reportedly been secured at USD 959 per tonne for the east coast.
The prices mark a sharp jump from the previous import tender just two months ago, when bids were slightly above USD 500 per tonne, reflecting the impact of escalating tensions in the Gulf and concerns over supply routes through the Strait of Hormuz.
India, the world’s largest importer of urea, buys nearly 10 million tonnes annually. The latest deal alone accounts for nearly one-fourth of that demand and could squeeze availability for other importing nations.
Reports said the tender attracted offers for 5.6 million tonnes, with most bids hovering close to USD 1,000 per tonne and some reaching as high as USD 1,136, underscoring growing global supply concerns.
Market experts believe the sheer scale of India’s procurement may leave other buyers scrambling, especially as producers have already committed significant volumes under the current tender.
The spike in prices comes amid fears that the conflict in West Asia and disruptions around the Strait of Hormuz could affect fertiliser shipments and raw material availability.
Despite concerns, the Centre has maintained that adequate fertiliser stocks are available for the upcoming kharif sowing season and said measures are in place to ensure uninterrupted supply to farmers.
Official data shows India’s fertiliser reserves stood at 18 million metric tonnes ahead of the kharif season, higher than last year’s 13 million tonnes, including around six million tonnes of urea in stock.
The government has also prioritised the fertiliser sector for natural gas allocation to support domestic production. Over the past decade, India’s urea production capacity has increased significantly, though the sector remains dependent on imported natural gas.
