For the first time, India will import urea in large quantities from the US

India is going to import urea in sufficient quantity from America for the first time.

South Korean conglomerate Samsung is about to load 47,000 tonnes of granulated urea at the port of New Orleans in the US for shipment to New Mangalore on India’s west coast. The cargo is to be supplied at a cost plus freight (CFR) cost of $716.5 per tonne. The corresponding free-on-board or FOB original price would be $635-640 per ton, in addition to the freight cost of about $65 from the US plus $10-15 to load from the barge.

The US has so far been only an occasional urea exporter. The commerce ministry data shows India’s exports of only 1.47 tonnes in 2019-20, 2.19 tonnes in 2020-21 and 43.71 tonnes in 2021-22. The 47,000-tonne quantity, for which loading is expected to begin later this week, is up against an import tender by Rashtriya Chemicals and Fertilizers Ltd. The state-owned company’s global tender, floated on May 11, resulted in a production of 1.65 million tonnes (mt). Urea is being contracted from various suppliers for delivery at CFR $716-721 per tonne in both West and East Coast ports.

“More ships are likely to arrive from the US in the coming months. This will help diversify our import sources and send the message to other suppliers,” an industry expert told The Indian Express.

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India imported 10.16 million tonnes of urea worth $6.52 billion in 2021-22. Imports are mainly from China (2.79 million tonnes), Oman (1.62 million tonnes), United Arab Emirates (1.06 million tonnes), Egypt and Ukraine (0.75 million tonnes), Qatar (0.58 million tonnes) and Saudi Arabia (0.50 million tonnes). Happened from

Buying more from the US also makes sense in the current context. FOB prices of Granulated Urea (US Gulf Futures) are trading at $500 per tonne for June and $455 for July delivery. These are well above the respective FOB prices of $610 and $595 per tonne for Middle East Urea.

“Freight cost is low, $15-20 per ton from Middle East. Travel time is also only 5-10 days, while from US it is 35 days or more. But these are somewhat of FOB at international prices. Can be offset by huge discounts, ”explained the expert.

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