The first urea vessel stranded since the West Asia war began in February has started sailing via the Strait of Hormuz and is expected to reach an Indian east coast port in 7-9 days, according to industry sources. Seven more urea-carrying ships are anticipated to start heading to India in the next few days, the sources added.
Vessel Movement Resumes via Strait of Hormuz
The vessel, carrying urea from a tender finalized by the government in mid-February via the public sector Rashtriya Chemicals and Fertilizers (RCF), was originally due around mid-March. "The first vessel with urea, which was supposed to arrive around mid-March got stuck after the war. Once it crosses Hormuz, other vessels too will start sailing," an industry source told BusinessLine. The source added that by July 15, all 3 lakh tonnes (lt) of imported urea from this tender could reach India.
In total, 16 ships carrying different fertilizers were awaiting passage through the Strait of Hormuz, according to industry sources. The breakdown includes:
| Fertilizer Type | Number of Ships | Volume (lakh tonnes) |
|---|---|---|
| Urea | 8 | 3.3 |
| DAP | 4 | 2.6 |
| Sulphur | 3 | 1.1 |
| Ammonia | 1 | Not specified |
The government had condoned the delay in receiving shipments due to the war, sources noted.
Price Dynamics and Tender Awards
The RCF tender in mid-February awarded contracts for supply of 10 lt of imported urea at $508 per tonne for west coast delivery and $512 per tonne for east coast delivery, with delivery by March 31. However, a subsequent tender by National Fertilizers Limited (NFL) — one of three canalizing agencies for urea import on government account — saw a dramatic price drop. Bids opened on June 8 yielded lowest rates of $449 per tonne for west coast and $445 per tonne for east coast delivery (CFR), significantly lower than the April tender when the government agreed to import 25 lt of urea at $935 per tonne (west coast) and $959 per tonne (east coast), according to Fertiliser Ministry Joint Secretary Bandana Preyashi.
The government has issued approval to import about 18 lt of urea through NFL at these lowest rates, sources said. Trade sources also indicated a further decline, with imported urea prices falling approximately $15 per tonne from the June 8 rates, bringing the current rate to June 2025 levels when the average FOB rate was $395 per tonne. However, some sources maintained the drop is not that steep yet. "Import demand for urea has slowed down in Asia," a trade source noted, adding that Australia has announced it will not import in the current crop season.
Supply and Inventory Position
Between March 1 and June 14, India imported 39.36 lt of fertilizers and produced 123.65 lt domestically, according to government data cited by Joint Secretary Preyashi. The country has secured urea supplies from a diverse set of nations including Oman, Malaysia, Vietnam, Georgia, Nigeria, Russia, Finland, Egypt, Algeria, Turkey, and the Netherlands. DAP and complex fertilizers (N, P, K, S) have been imported from Russia, Morocco, Egypt, USA, Jordan, South Korea, Tunisia, and Saudi Arabia after the war.
As of June 14, India held a stock of 196.65 lt of fertilizers, though it requires 281.12 lt more by September 30 to meet domestic demand. Already, 102.78 lt of various chemical fertilizers were sold between April 1 and June 14.
Demand and Outlook
The easing of shipping constraints through Hormuz, combined with sharply lower global urea prices, is expected to improve India's fertilizer availability. The government's approval of additional imports at $445-449/tonne — about half the April tender price — will help reduce procurement costs. However, the slowdown in Asian demand and Australia's withdrawal from the urea market could keep prices under further pressure. Market participants will watch for the arrival of the first vessel on the east coast and subsequent tenders by NFL and other agencies. The Fertiliser Ministry's next stock assessment and any further import approvals will be key data points in the coming weeks.
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